Bharat Dynamics Ltd (BDL) shares surged 5% on June 15 on the back of increased order inflows from FY25. At 10:40 a.m., the shares of the defense company were trading at Rs 1,142.60, up 3.42 percent. In the last three months, the stock has increased by 27%.
Despite growth in revenue remains elusive thus far, we see several positive signs for BDL as significant order inflow is expected FY25 onward," noted ICICI Securities on June 13, 2023, after engaging with the company's management.
The domestic brokerage business has reduced its FY24 and FY25 projections by 21% and 8%, respectively, since execution is expected to pick up in FY26. According to ICICI Securities, revenue will likely increase from FY26 to FY27, with revenue being twice as high as in FY24.
In partnership with DRDO, BDL anticipates getting orders for QRSAM, HELINA ATGM, and NAG ATGM in FY26, and orders for Akash NG, VLRSAM, and MPATGM in FY27. Furthermore, the company is working closely with the Indian Air Force to finalize a contract for the procurement of a locally developed smart anti-airfield weapon. The DRDO has tested two distinct SAAW variants, and BDL anticipates receiving the order in FY27.
According to ICICI Securities, the order book stands at Rs 20410 crore as of May 2023, suggesting a healthy bill-to-book ratio (trailing twelve months) of 8.2 times. It also stated that the order inflow for April and May 2023 was Rs 520 crore.
However, due to increased profitability in FY27, the brokerage company has raised its target price on the shares to Rs 1,325 from Rs 1,175. In FY24, the management expects revenue of Rs 3,200 crore and an EBITDA margin of 20-23 percent.
We see BDL as an appealing medium-term investment opportunity, as both orders and execution are likely to pick up, said ICICI Securities
