Bharat Dynamics Ltd
Bharat Dynamics Ltd
Industrials F&OBharat Dynamics (BDL), is a Government of India Enterprise. It is engaged in the manufacturing of guided missiles and allied defence equipments [1] [2].
BDL trades at an extremely stretched PE of 122.7x with declining TTM sales (-27%) and profit (-24%), making fresh entry risky despite its strategic defence positioning. The stock has delivered 37% CAGR over 3 years but near-term earnings visibility is weak with ROE falling to 10% last year.
Key Fundamentals
MidcapEngineeringAerospace & DefenseTechnical Indicators
Key Insights
Strengths
3- Company has reduced debt.
- Company is almost debt free.
- Company has been maintaining a healthy dividend payout of 35.1%
Weaknesses
4- Stock is trading at 12.0 times its book value
- The company has delivered a poor sales growth of 4.99% over past five years.
- Company has a low return on equity of 13.9% over last 3 years.
- Earnings include an other income of Rs.424 Cr.
Growth Rate
AI Analysis — Bull vs Bear
anthropic claude-opus-4.6 1d agoBDL trades at an extremely stretched PE of 122.7x with declining TTM sales (-27%) and profit (-24%), making fresh entry risky despite its strategic defence positioning. The stock has delivered 37% CAGR over 3 years but near-term earnings visibility is weak with ROE falling to 10% last year.
- Company is almost debt-free, providing financial flexibility for future capex and order execution
- 3-year stock CAGR of 37% reflects strong re-rating driven by India's defence indigenisation push
- 5-year stock CAGR of 51% demonstrates sustained long-term wealth creation for investors
- Healthy dividend payout ratio of 35.1% ensures shareholder returns even in lean earnings years
- 5-year compounded profit growth of 10% shows underlying earnings trajectory is positive over medium term
- 3-year ROE average of 14% is respectable for a capital-intensive defence PSU
- Market cap of Rs.51,663 Cr reflects institutional confidence in BDL's order pipeline and monopoly in missile systems
- PE ratio of 122.7x is excessively expensive, pricing in years of flawless execution with zero margin of safety
- TTM sales declined 27% year-on-year indicating severe revenue recognition lumpiness and order execution delays
- TTM profit declined 24% showing earnings are contracting sharply in the near term
- Price-to-book of 12.16x is extremely elevated for a PSU with 10% last-year ROE, implying poor capital efficiency at current valuation
- 5-year compounded sales growth of just 5% is underwhelming for a company trading at growth multiples
- Last year ROE dropped to 10% from 14% three-year average, signaling deteriorating return profile
- Other income of Rs.424 Cr inflates reported earnings, masking weaker operating performance
- Analyst consensus is divided with only 38.5% recommending Buy while 30.8% recommend Sell, reflecting uncertainty
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
anthropic claude-opus-4.6 14h ago- Q4 revenue collapses 73% YoY May 29
Q4 FY26 revenue fell 73% YoY to ₹480 crore vs ₹1,777 crore, net profit dropped 59% to ₹113 crore (66% below estimates), driven by supply-chain disruptions from West Asia conflict and delays in radars/seekers for Akash and Astra Mk1 missiles.
- Multiple brokerage downgrades May 29
Motilal Oswal downgraded to 'Neutral' cutting target to ₹1,150 from ₹1,500 with 25-28% EPS cuts for FY27/FY28; Nuvama downgraded to 'Reduce' slashing target to ₹1,150 from ₹1,900 with 48%/40% cuts in FY27E/28E EPS.
- FY26 full-year decline across metrics May 28
Full-year FY26 revenue/EBITDA/PAT declined 27%/53%/24% YoY to ₹2,440 crore/₹220 crore/₹420 crore, with EBITDA margin contracting 500bp to 9.1%, significantly underperforming defence PSU peers like HAL and BEL.
- Stock down 8% post-results May 29
Shares slumped 8.44% to ₹1,175.05 intraday on May 29; stock is down 33% over one year and 13% YTD, now trading at stretched valuations of 70.5x FY27E EPS.
- Supply chain and execution risks May 29
Execution impacted by external vendor delays on radars, seekers and components; margins under pressure from higher bought-out component share, with near-term recovery elusive despite ₹26,000 crore order book.
- Exchange fines for non-compliance May 29
BSE and NSE each fined Bharat Dynamics ₹6,96,200 for non-compliance with SEBI LODR regulations regarding director appointments.
- ₹1,348 crore orders from HAL Jun 24
BDL received orders worth ₹1,347.71 crore from HAL for Helina Launchers (₹1,109.37 crore) and CMDS LRUs (₹238.34 crore), to be executed domestically within 24-60 months.
- BrahMos Indonesia deal nearing Jun 9
PM Modi's upcoming Jakarta visit expected to finalize BrahMos missile deal with Indonesia, with BDL referenced as part of India's defence export ecosystem in the Indo-Pacific region.
- Healthy ₹26,000 crore order book May 29
Despite weak quarterly execution, BDL maintains a strong order book of ~₹26,000 crore across MRSAM, QRSAM, Astra, Akash, Akash-NG, VL-SRSAM, Nag, HELINA and MPATGM programmes, with ₹2,000-2,500 crore revenue expected in H1 FY27.
- Dividend maintained at ₹4.90/share May 28
Total FY26 dividend of ₹4.90 per share (₹4.50 interim + ₹0.40 final) actually higher than FY25's ₹4.65, reflecting management confidence despite earnings pressure; company remains debt-free.
- New CMD appointed Jun 19
Shailesh Vagerwal appointed as Chairman & Managing Director effective from date of charge assumption until 31.03.2031.
- Investor meets scheduled Jun 8
BDL scheduled analyst and fund manager meetings on June 11, 2026 in Hyderabad; no unpublished price sensitive information to be shared.
- Executive Director retires Jun 1
Cmde. Girish Raghunath Pradhan retired on May 31, 2026 upon attaining superannuation age.
TL;DR: BDL is going through a severe execution trough with Q4 FY26 revenue collapsing 73% and full-year metrics declining sharply, significantly underperforming defence PSU peers like HAL and BEL due to company-specific supply chain vulnerabilities. The ₹26,000 crore order book and new HAL orders provide long-term visibility, but near-term earnings recovery hinges on component supply resumption in H1 FY27. Multiple brokerage downgrades and stretched valuations at 70x FY27 EPS create an unfavorable risk-reward, and the trend is deteriorating until execution improvement is demonstrated.
Quarterly Results
| Mar 2023 | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 798 | 298 | 616 | 602 | 854 | 191 | 545 | 832 | 1,777 | 248 | 1,147 | 567 | 480 |
| Expenses | 615 | 330 | 482 | 483 | 538 | 243 | 446 | 705 | 1,478 | 293 | 960 | 541 | 425 |
| Operating Profit | 183 | -33 | 134 | 119 | 316 | -52 | 99 | 127 | 299 | -45 | 188 | 26 | 55 |
| OPM % | 23% | -11% | 22% | 20% | 37% | -27% | 18% | 15% | 17% | -18% | 16% | 5% | 12% |
| Other Income | 37 | 107 | 78 | 88 | 88 | 80 | 86 | 84 | 100 | 87 | 121 | 97 | 119 |
| Interest | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 |
| Depreciation | 14 | 17 | 17 | 16 | 16 | 16 | 18 | 18 | 20 | 18 | 19 | 19 | 20 |
| PBT | 206 | 57 | 194 | 189 | 388 | 11 | 166 | 193 | 378 | 23 | 288 | 103 | 154 |
| Tax % | 26% | 27% | 24% | 29% | 26% | 36% | 26% | 24% | 28% | 21% | 25% | 29% | 26% |
| Net Profit | 153 | 42 | 147 | 135 | 289 | 7 | 123 | 147 | 273 | 18 | 216 | 73 | 113 |
| EPS in Rs | 4.17 | 1.14 | 4.01 | 3.68 | 7.88 | 0.2 | 3.34 | 4.01 | 7.44 | 0.5 | 5.89 | 1.99 | 3.09 |
Profit & Loss
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 2,841 | 4,079 | 4,887 | 4,588 | 3,069 | 3,105 | 1,914 | 2,817 | 2,489 | 2,369 | 3,345 | 2,442 |
| Expenses | 2,564 | 3,564 | 4,317 | 3,919 | 2,446 | 2,349 | 1,568 | 2,090 | 2,080 | 1,832 | 2,872 | 2,218 |
| Operating Profit | 277 | 515 | 569 | 669 | 623 | 756 | 346 | 727 | 409 | 537 | 473 | 223 |
| OPM % | 10% | 13% | 12% | 15% | 20% | 24% | 18% | 26% | 16% | 23% | 14% | 9% |
| Other Income | 439 | 385 | 300 | 173 | 136 | 88 | 95 | 78 | 155 | 362 | 350 | 424 |
| Interest | 5 | 5 | 4 | 4 | 5 | 5 | 5 | 5 | 6 | 4 | 4 | 3 |
| Depreciation | 67 | 53 | 62 | 63 | 82 | 96 | 95 | 90 | 77 | 67 | 71 | 76 |
| PBT | 644 | 841 | 803 | 774 | 671 | 742 | 341 | 710 | 482 | 828 | 749 | 568 |
| Tax % | 31% | 33% | 35% | 32% | 37% | 28% | 24% | 30% | 27% | 26% | 27% | 26% |
| Net Profit | 444 | 562 | 524 | 528 | 423 | 535 | 258 | 500 | 352 | 613 | 550 | 420 |
| EPS in Rs | 1,928 | 2,810 | 2,184 | 14.41 | 11.53 | 14.59 | 7.03 | 13.64 | 9.61 | 16.71 | 14.99 | 11.47 |
| Div. Payout % | 19% | 30% | 30% | 25% | 30% | 30% | 52% | 30% | 49% | 32% | 31% | 43% |
Balance Sheet
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 115 | 98 | 122 | 183 | 183 | 183 | 183 | 183 | 183 | 183 | 183 | 183 |
| Reserves | 1,538 | 1,753 | 2,073 | 1,773 | 2,085 | 2,424 | 2,501 | 2,847 | 3,028 | 3,454 | 3,826 | 4,058 |
| Borrowings | 0 | 4 | 4 | 4 | 5 | 15 | 11 | 10 | 9 | 8 | 7 | 0 |
| Other Liabilities | 6,759 | 7,786 | 6,208 | 4,697 | 3,250 | 3,128 | 3,334 | 3,595 | 5,535 | 6,781 | 7,798 | 10,020 |
| Total Liabilities | 8,412 | 9,641 | 8,407 | 6,657 | 5,523 | 5,750 | 6,030 | 6,636 | 8,756 | 10,426 | 11,814 | 14,262 |
| Fixed Assets | 518 | 697 | 757 | 868 | 957 | 932 | 915 | 874 | 809 | 824 | 857 | 1,003 |
| CWIP | 142 | 126 | 136 | 130 | 47 | 42 | 22 | 41 | 74 | 73 | 230 | 174 |
| Investments | 3 | 3 | 3 | 239 | 4 | 4 | 5 | 0 | 0 | 0 | 4 | 4 |
| Other Assets | 7,749 | 8,815 | 7,511 | 5,420 | 4,516 | 4,771 | 5,089 | 5,721 | 7,873 | 9,530 | 10,723 | 13,081 |
| Total Assets | 8,412 | 9,641 | 8,407 | 6,657 | 5,523 | 5,750 | 6,030 | 6,636 | 8,756 | 10,426 | 11,814 | 14,262 |
Cash Flow
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | -765 | 284 | -420 | -342 | 84 | 504 | 1,068 | 530 | 2,130 | 412 | 167 | — |
| Investing | 239 | 149 | 3 | 1,047 | 170 | -33 | -734 | -573 | -1,171 | -722 | -407 | — |
| Financing | -72 | -324 | -166 | -769 | -268 | -191 | -173 | -149 | -171 | -148 | -220 | — |
| Net Cash Flow | -598 | 109 | -583 | -63 | -15 | 280 | 162 | -192 | 788 | -459 | -460 | — |
| Free Cash Flow | -943 | 68 | -556 | -510 | -5 | 447 | 1,012 | 428 | 2,022 | 331 | -115 | — |
| CFO/OP | -197 | 109 | -15 | -13 | 61 | 90 | 332 | 101 | 574 | 106 | 78 | — |
Ratios
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 43 | 13 | 12 | 61 | 63 | 40 | 62 | 39 | 27 | 48 | 90 | 63 |
| Inventory Days | 286 | 302 | 276 | 254 | 380 | 222 | 636 | 534 | 584 | 841 | 591 | 1,381 |
| Days Payable | 100 | 202 | 186 | 129 | 115 | 83 | 322 | 171 | 142 | 325 | 328 | 846 |
| Cash Conversion Cycle | 230 | 114 | 101 | 186 | 328 | 178 | 375 | 403 | 469 | 564 | 354 | 598 |
| Working Capital Days | -126 | -106 | -11 | 44 | 128 | 195 | 169 | 144 | 237 | 322 | 207 | 254 |
| ROCE % | — | 48% | 40% | 37% | 32% | 31% | 13% | 26% | 16% | 24% | 20% | 14% |
Documents
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Company Information
Bharat Dynamics (BDL), is a Government of India Enterprise. It is engaged in the manufacturing of guided missiles and allied defence equipments [1] [2].