Bharat Electronics gains after PSU signs Rs 8,060 crore deal with US-based EV company; Should you buy?

Bharat Electronics, NSE: BSE, gained more than 2 per cent today, October 20, after the company announced Rs 8060 crore deal with electric vehicle maker Triton Electric Vehicle (TEV). On NSE, BEL settled at Rs 108.5, advancing 2.03 pe cent while Rs 108.10 on BSE.

According to Zee Business panellist Kiran Jadhav, Bharat Electronics chart patterns are strong. He said that the short-term target would be Rs 112. He suggested maintaining s stop loss of Rs 106.8

BEL is an aerospace and defence electronics company under the Ministry of Defence. The PSU Navratna company has received a letter of intent from Triton Electric Vehicle India for the procurement of 300 KW Li-Ion battery packs for its semi-truck project at an estimated value of Rs 8,060 crore, according to a regulatory filing. Triton Electric Vehicle India is a part of Triton Electric Vehicle LLC, USA.

The 300-kilowatt lithium-ion battery packs are to be delivered by Bharat Electronics (BEL) to Triton in 24 months commencing from January 2023, the filing stated.

"Triton Electric Vehicle India Pvt Ltd, a part of Triton Electric Vehicle LLC, USA today issued a letter of intent to Navaratna Defence PSU Bharat Electronics for procurement of 300 KW Li-Ion battery packs for its semi-truck project in India at an estimated value of Rs 8,060 crore," the filing said.

BEL chairman and managing director Dinesh Kumar Batra received LoI from Triton Electric Vehicle LLC CEO and Founder Himanshu B Patel at Defexpo 2022 in Gandhinagar.

"The purchase order for first-off quantity with 100 per cent advance payment has been handed over to BEL by Triton. BEL will deliver the first-off quantity by November 2022. The battery packs will be manufactured at the Pune unit of BEL," the filing said.

BEL has also signed a memorandum of understanding (MoU) with Triton Electric Vehicle for manufacture of Hydrogen Fuel Cells by BEL with technology transfer from TEV to meet the requirements of the Indian market and mutually agreed export markets.

TEV has set up its R&D centre and manufacturing facility in India. It has recently forayed into Hydrogen-run vehicles and started the journey of manufacturing Hydrogen-run two-wheelers, three-wheelers and buses.

"The MoU aims at tapping the demand for clean energy solutions for various applications including E-Mobility by leveraging government of India's thrust for adoption of clean energy fuels for applications in transport, energy storage etc," the filing said.

BEL is multibagger stock, yielding 90 per cent returns in the past 5 years and 60 per cent in past 1 year. The stock has clocked around 54 per cent return in 2022 so far.

BEL was founded in 1954 and has its headquarters in Bengaluru. BEL manufactures advanced electronic products for the defence forces.