Buy Bharat Dynamics; target of Rs 2000: Motilal Oswal

Motilal Oswal's research report on Bharat Dynamics

Bharat Dynamics (BDL) delivered a strong performance in 2QFY26 as supply chain issues started easing out, resulting in a sharp execution ramp-up. However, margins were affected by project mix during the quarter. The company also announced an order inflow of INR20b from Invar anti-tank missiles, and BDL is expected to benefit from emergency procurement, QRSAM, follow-on Astra orders from HAL, VSHORADS, etc. With a strong order book of INR235b and a focus on execution, we expect the company to grow revenue/EBITDA/PAT at 35%/64%/51% over FY25-28. The stock is currently trading at 40.1x/29.2x P/E on FY27/FY28 estimates. We reiterate our BUY rating on the stock with a revised TP of INR2,000, based on 42x Dec’27E earnings.

Outlook

We maintain our estimates and expect execution and margins to scale up in the coming quarters. We maintain our BUY rating on the stock with a revised TP of INR2,000, based on 42x P/E Dec’27E EPS.