Bharat Dynamics Ltd. share price target

Bharat Dynamics (BDL) reported a healthy Q3FY25 performance. EBITDA (adj. for provisions created) sored 120% YoY to INR 2.6bn while revenue surged 34% YoY to INR 7.9bn.

Bharat Dynamics’ (BDL) Q2FY24 performance was resilient led by pick-up in execution. Key points: 1) In our view, profitability was aided by execution of ATGMs – most of which have high indigenous content; 2) revenue growth was partially aided by making up of some shortfall in FY23; and 3) other income was aided by customer advances received post ordering of Akash 3rd and 4th regiment.

Bharat Dynamics (BDL) reported loss at the EBITDA level in Q1FY24. Key points: 1) revenue was down 57% YoY as the quarter did not have certain deadline-specific orders it had last year ; 2) fixed costs remained broadly stable; 3) other income surged on the back of advances (mainly for Akash 3rd and 4th regiments); and 4) orderbook as of 30th Jun’23 was at INR 202.2bn, implying orderbook/revenue (ttm) of 9.7x.

We hosted the Bharat Dynamics (BDL) management for a meeting with investors on 13th Jun’23. Key points: 1) orders pertaining to several defence programmes are expected post FY25 in association with DRDO, BDL’s own R&D and collaboration with foreign players; 2) company is ready for QRSAM production as limited validation trials got over in Apr’23.

We perceive the knee-jerk reaction to Bharat Dynamics’ (BDL) stock post its Q4FY23 result as an opportunity to BUY, as the company has robust orderbook and execution is picking up. BDL’s Q4FY23 EBITDA missed our estimate by 14%.

Bharat Dynamics’ (BDL) Q3FY23 EBITDA was down 69% YoY (5% QoQ) at Rs889mn. Key highlights: i) EBITDA margin expanded to 19.3% in Q3FY23 (Q2FY23: 17.5%) and gross margin too remained healthy at 69.8%. ii) Higher R&D expenses in light of future opportunities resulted in spurt in ‘other expenses’.

Bharat Dynamics’ (BDL) Q2FY23 EBITDA was up 42% YoY (123% QoQ) at Rs939mn. Key highlights: i) EBITDA margin expanded to 17.5% in Q2FY23 (Q2FY22: 13.1%; Q1FY23: 6%) and gross margin too remained healthy at 55.4%.

Bharat Dynamics (BDL) has reported lower-than-expected earnings in Q1FY23 with ~50% QoQ decline in revenue and ~85% QoQ decline in PAT.

Bharat Dynamics Ltd (BDL) is the leading defence PSUs with over four decades of experience in manufacturing Surface to Air missiles (SAMs), Anti-tank guided missiles (ATGMs), underwater weapons, launchers, countermeasures and test equipment. Additionally, BDL is engaged in the business of refurbishment & life extension of missiles manufactured and is also a sole supplier of SAMs & ATGMs to Indian armed forces. The company currently has three manufacturing facilities located in Hyderabad, Bhanur and Vishakhapatnam. Over the last five years, BDL has delivered consistent growth...

The objects of the Offer are:


To carry out the disinvestment of Equity Shares by the Selling Shareholder.
To achieve the benefits of listing the Equity Shares on the Stock Exchanges.


Company’s two additional manufacturing facilities which is in process of setting up at Ibrahimpatnam (near Hyderabad) and Amravati in Maharashtra which shall be used to manufacture SAMs and Very Short Range Air Defence Missiles (VSHORADMs) respectively , expected to be operational by FY2021 & its current order book as of January 31, 2018, at ?10,543cr with additional capital expenditure that the company would incur next year combined with the advantage that it has being the sole manufacturer for SAMs, torpedoes, ATGMs and also the sole supplier of SAMs and ATGMs to the Indian armed forces, with a CAGR growth of around 30% attracts the company.

Moreover, taking into consideration, the current market opportunities in defense and Government of India’s initiative, ‘Make in India’ aims to boost the nation’s domestic manufacturing sector as well as to create market by targeting international market. Considering all these factors, we recommend to SUBSCRIBE the IPO

IPO NOTE

Modern facilities and infrastructure to deliver quality products in a timely manner: *A discount of Rs 10 per equity share on offer price is offered to retail and employees The Company believes that the infrastructure at its manufacturing facilities combined with its vast expertise enable the company to cater to the needs of the Indian armed forces in a timely manner. Its manufacturing facilities are equipped with robotic welding machines, fits...

IPO Note - Bharat Dynamics Limited (BDL) Issue Open: Mar 13 - Mar 15, 2018, Price Band: Rs 413 - 428 (A discount of Rs 10 per eq sh offered to retail and employees.), Issue Size: 22,451,953 Equity Shares, (Entirely Offer for sale including Employee reservation of 458,203 eq sh), Offer Size: Rs927.27cr - 960.94cr *