Buy Bharat Dynamics; target of Rs 1400: ICICI Securities

ICICI Securities's research report on Bharat Dynamics

Bharat Dynamics (BDL) reported a healthy Q3FY25 performance. Key points: 1) EBITDA (adj. for provisions created) sored 120% YoY to INR 2.6bn while revenue surged 34% YoY to INR 7.9bn. 2) Estimated order book (OB), as on date, is at INR 200bn, of which nearly INR 20bn is from exports. 3) Provision of INR 1.35bn recognised towards investment or gaining exposure in a niche technology. 4) Board recommended interim dividend of INR 4/share. We expect BDL’s performance to improve further, as execution has visibly picked up, leading to higher margins. Besides, the OB remains strong and MRSAM backlog is also likely to be cleared. We maintain BUY and our DCF-based TP of INR 1,400.

Outlook

We envisage revenue growth traction continuing. The order for QRSAM, estimated at INR 250bn, would boost the OB further, besides the expected orders from the exports market. We maintain BUY on BDL at a DCF-based unchanged TP of INR 1,400.