BEL Shares: A Long-Term Investment Opportunity in a Volatile Market
Bharat Electronics Limited (BEL) has been a top choice for many investors due to its consistent performance and steady growth in the defense and aerospace industries. At a current trading price near 305, it remains a compelling option for both short-term and long-term investments. Despite the volatile market conditions, BEL's potential growth makes it a strong candidate for those looking to invest for the long haul.
Previous Performance and Current Valuation
Over the years, BEL has gained a reputation among investors for delivering reliable returns. In a past review, it was noted that the stock had been booked for profit multiple times, making it a go-to choice for profits. With the stock trading near 305, its historical volatility suggests that it could range between 250 to 350. At the lower end of this range, the downside risk is limited, while the upside potential of reaching 350 remains promising.
The recent quarter's profit for BEL has further solidified its position as a strong performer. An investor who bought around 150 shares of BEL at Rs. 70.30 on 3/06/2020 has seen a profit of around Rs. 3000 at the current price of approximately Rs. 90. This performance underscores the stock's potential for delivering substantial gains over time.
Long-Term Investment Potential
For long-term investors, BEL presents a compelling case. The company's strategic positioning in defense and aerospace sectors, combined with the supportive government policies, ensures a steady revenue stream. Investors with a horizon of 2-3 years can expect the stock to double, while those looking further into the future may see a four to five times increase by 2030. This growth potential is a significant advantage for investors willing to invest with patience.
BEL's current volatility provides an opportunity to invest in a market that is segmented by both optimistic projections and short-term uncertainties. The current fall in the market represents a short-term pain that will ultimately pass away as the company continues to perform well. Investing in BEL for the long term can provide substantial returns, especially given its strong fundamentals and potential for growth.
Why PSU Shares are Not Preferred
It is not uncommon for investors to shy away from Public Sector Undertakings (PSUs) even when there is potential for value. This reluctance stems from the perception that such companies often yield sub-par returns. A striking example is the performance of BEL, which, despite being a PSU, has consistently outperformed many other companies in the sector.
If an investor had bought shares of BEL in July 2015, they would have experienced a significant loss of 12%, which is far worse than the interest one would earn in a savings account. This stark reality highlights the importance of thoroughly analyzing stocks like BEL before making a long-term investment. The consistent performance and upward trajectory of BEL make it a safer and more rewarding choice compared to the average PSU.
Investors should consider the long-term growth potential and fundamental strength of stocks like BEL when making investment decisions. The current market volatility presents a chance to capitalize on the undervalued stocks, leading to substantial returns over time.
In conclusion, BEL remains a compelling long-term investment option, especially in today's volatile market. By analyzing past performance, current valuation, and long-term potential, investors can make informed decisions that lead to substantial gains. It is a stock to watch for those willing to invest with patience and strategic foresight.