1:2 Split + Rs 14.35 Dividend In 2 Fiscals: Zero-Debt Defence Stock BDL To See Rocket Rally; Buy For Target?

Zero-debt defence giant, Bharat Dynamics (BDL) has witnessed sharp correction on November 18, with its share price falling by 2%. Despite this, BDL still gives nearly 37.4% returns year-to-date and its recent performance has been favourable. That being said, after a strong Q2, BDL stock price is recommended to BUY with expectation of missile like rally. Two brokerages have set near Rs 2,000 target price for BDL, which signalled nearly 29% potential rally ahead.

Bharat Dynamics (BDL) Share Price

After market hours of November 19, BDL stock closed at Rs 1557.35 apiece, down by 2% on BSE with market cap of Rs 57,086.61 crore. Despite this, the midcap defence giant, surged nearly 2% on week-on-week basis. YTD, the stock has climbed by 37.4%.

BDL is the key rival of two largest defence players in India namely Hindustan Aeronautics (HAL) and Bharat Electronics (BEL).

Although, the company has not made any corporate action for FY26 yet, it holds a strong record of dividend payout in previous two fiscals and also one stock split.

Dividends: As per the data on BSE, BDL delivered Rs 4.65 per share dividend for FY25 and its record dates were in February and September of the current year. While, the company paid up to Rs 9.7 dividend per share in FY24.

Stock Split: Additionally, BDL carried a stock slit of 1:2 ratio with effect from May 24, 2024. The face value of Rs 10 was split to Rs 5.

Bharat Dynamics New Order:

Last week, BDL signed a contract worth Rs 2,095.70 crore with Ministry of Defence for supply of Invar Anti-tank missiles for the Indian Army. The new order will be executed in a span of 3 years.

BUY Bharat Dynamics Stock?

Choice Institutional Equities On BDL Share Price:

Analysts here said, "We believe that multiple high-value indigenous programs, such as Astra Mk-2, Akash NG and ATGM, are expected to move into

production. Hence, BDL remains one of the most credible beneficiaries of India's growing missile modernisation agenda. Its established infrastructure, close collaboration with DRDO and proven execution capability across complex missile systems provide it a clear competitive advantage. These upcoming projects are poised to significantly expand the orderbook, driving sustained revenue visibility and margin accretion over the medium term."

BDL's robust orderbook of ~7x FY25 revenue, coupled with an incremental pipeline of INR 500-600 Bn, provides multi-year earnings visibility and operating leverage tailwinds. As execution scales up, the analysts expect strong cash generation and profitability improvement through FY28E.

Hence, analysts said, "Given the company's strategic positioning and healthy financials, we maintain our BUY rating with a TP of INR 1,965, valuing the stock at 35x average of FY27-28E EPS."

Motilal Oswal On BDL Share Price:

Analysts at Motilal maintained estimates and expect a CAGR of 35%/64% in revenue/EBITDA over FY25-28, primarily driven by a sharp scale-up in execution due to moderating supply chain issues.

They further expect the EBITDA margin to remain strong at 23.8%/24.7%/25.5% in FY26/FY27/FY28, fueled by the various indigenization efforts taken by the company and lower provisions.

Accordingly, they said, "With an estimated annual capex of INR2.0b/ INR2.5b/INR3.0b in FY26/FY27/FY28 and comfortable working capital, we expect a 51% CAGR in PAT over FY25-28. With improving revenue and stable margins, we expect its RoE/RoCE to remain comfortable, reaching 25.2%/25.6% by FY28."

On the valuation, Motilal analysts added, "The stock currently trades at 53.7x/40.1x/29.2x P/E on FY26/FY27/FY28 estimates. 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."

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