Bharat Dynamics shares drop 5% as profit, margins disappoint in Q4FY25

Bharat Dynamics’ shares dip 5 percent after Q4 margin shock

Shares of Bharat Dynamics ended their two-day winning streak, falling by 5 percent to Rs 1,844 per share on May 28. The decline came after the defence manufacturer reported a drop in quarterly profits and a significant contraction in operating margins.

This pullback followed a strong rally in defence stocks fueled by hopes of increased military spending amid recent cross-border tensions. For the month so far, shares of Bharat Dynamics have rallied 21 percent, far outpacing the 2 percent gain in the benchmark Nifty 50 index.

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Bharat Dynamics net profit slipped 6 percent YoY to Rs 272 crore in Q4FY25 from Rs 288 crore in Q4FY24. However, revenue more-than-doubled or jumped 112 percent YoY to Rs 1,800 crore in Q4FY25.

Operationally, the company's Ebitda rose modestly by 4 percent YoY to Rs 322 crore in Q4FY25, whereas margins narrowed sharply by 1,870 bps YoY to 18 percent in Q4FY25.

Despite the mixed financial performance, analysts at Nuvama maintained a "buy" rating on the stock and raised their target price to Rs 2,250 per share, up from Rs 1,650.

“The company delivered a strong topline in Q4FY25, and we expect this momentum to carry into the next fiscal,” analysts noted. They added that the order backlog has increased to Rs 22,800 crore, providing solid revenue visibility over the next three to four years.

“We are factoring in a 60 percent compound annual growth rate (CAGR) in revenue for FY25–27, with operating profit margins of 22 to 23 percent, supported by backward integration and easing supply-side constraints. We have revised our FY27 estimated earnings per share (EPS) upward by 6 percent, assigning a price-to-earnings multiple of 45 times on the FY27 EPS of Rs 50,” the note added.

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