Hold Bharat Dynamics: target of Rs 1590: ICICI Securities

ICICI Securities's research report on Bharat Dynamics

BDL’s Q2FY26 performance beat consensus expectation as EBITDA grew 90% YoY driven by strong sales (+114% YoY). EBITDA margin fell 180bps YoY to 16.3%, implying an adverse product mix (gross margin was lower) and potentially higher R&D expenses (other expenses were higher). It won additional orders worth INR 21bn and its current orderbook stands at over INR 240bn. BDL expects execution to remain strong in near to medium term, and thus, continues to guide for revenue of INR 42-43bn in FY26; it maintains 30% revenue growth rate for next couple of years. Higher R&D and capex spend could keep EBITDA margin lower. We have rolled over our target multiple to FY28E and have arrived at a TP of INR 1,590, based on 40x FY28E EPS. Downgrade to HOLD (from Add).

Outlook

We assign BDL with a similar multiple as BEL and have arrived at a TP of INR 1,590 (40x FY28E EPS). Downgrade to HOLD.