Sumit Bilgaiyan
Bharat Dynamics is engaged in the manufacturing of surface to air missiles (SAMs), anti-tank guided missiles (ATGMs), underwater weapons, launchers, countermeasures and test equipment primarily catering
to the Indian armed forces.
As of January 31, 2018, BDL’s order book stands at Rs 10,543 crore, which is 2.2x FY17 revenue. Government’s focus on the defence sector with the introduction of favorable policies like New Defence Procurement Policy (DPP) 2016, FDI, Make in India are likely to open many opportunities for
Bharat Dynamics.
Going forward the company is looking at focusing on R&D, enhancing its product portfolio, setting up two more manufacturing facilities at Ibrahimpatnam and Amravati and exploring international markets which will become growth engines of Bharat Dynamics.
If you looked at financials, over FY15-17, Bharat Dynamics reported revenue and PAT CAGR of 30 percent and 5 percent, respectively. EBITDA margins stood at 9.7 percent/12.6 percent/11.8 percent in FY15/16/17. RoE stood at 24 percent in FY17.
Bharat Dynamics has consistently declared dividends over FY13-17. We have a buy rating with target of Rs 435.
Disclaimer: The author is Founder, Equity99. The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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