Dividend Policy and its impact on the company

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About the Company

Bharat Electronics Limited (BEL) was set up at Bangalore, India, by the Government of India under the Ministry of Defence in 1954 to meet the specialised electronic needs of the Indian defence services. It is one of the Navaratna Company The company was first listed on stock exchanges in the year 1992 with a 8/2/12 public issue of 20% of its shares.

Bharat Electronics Ltd. (BEL) had announced its financial results for the financial year 2009-10 and it had reported to register a turnover of Rs. 5,235 crore for the year. It was around Rs. 4,624 crore in the year 2008-09. That meant that the company had managed to increase its turnover by 13%. The gross profit of the company was

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The company had paid an interim dividend of 60% to its investors for the year 2009-10. It had paid a dividend of 187% in the year 200809. Due to some exceptional provisions the net profit of the company had fallen in the last quarter of 2009-10. But the overall report was not so discouraging. 8/2/12

For the year 2011, the company recorded a profit of Rs. 5404 crore and profit of Rs.737.3 crore The companys present market capitalisation is around Rs. 12500 crore The EBITDA margin of the company are under significant pressure having reduced to 16.24% in 2011 from a 8/2/12 high of 26% in 2008.

The policies and activities including dividend policy of the SOEs(state owned enterprises) in India are subject to the recommendations and guidelines issued by various statutory committees like Committee on Public Undertakings (COPU), Public Accounts Committee (PAC) and Department of Public Enterprises (formerly known as Bureau of Public 8/2/12 Enterprises, BPE).

Dividend Payout Trend of BEL

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Contd.

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Impact on Share Price

Price Movements from the year 2006

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CONCLUSION

The number of dividend paying SOEs in India is comparatively small compared to the total number of profit earning SOEs. The quantum of aggregate dividends of the SOEs has gone up faster in post 1991 period than the earlier period. Dividend pattern of the SOEs 8/2/12 according to the industry group or

The tendency of SOEs increasing the dividend rate over the years is reflected in the presence of positive constant in the resultant equations of all but few. EPS is a major factor in deciding the dividend rate. It should be considered as a healthy sign for these potential blue chips 8/2/12 when they go for tapping resources