Bharat Dynamics stock down 20% from all-time high; what brokerages say

Business Standard

18-07-2025

Bharat Dynamics share price
Shares of Bharat Dynamics (BDL) continued to remain under pressure, falling 3 per cent to ₹1,687 on the BSE in Friday's intra-day trade. The stock price of the state-owned defence company was quoting lower for the seventh straight trading day, declining 15 per cent during the period. It has corrected 20 per cent from its all-time high of ₹2,096 touched on May 30, 2025.
However, despite a price correction from its record high, thus far in the calendar year 2025, BDL has outperformed the market by surging 50 per cent. In comparison, the BSE Sensex was up 4 per cent during the period. BDL had hit a 52-week low of ₹897.15 on November 18, 2024. CATCH STOCK MARKET LATEST UPDATEST LIVE
Brokerages view on Bharat Dynamic
In July 2025, Motilal Oswal Financial Services (MOFSL) initiated coverage on BDL with a 'Neutral' rating. The brokerage firm said it likes the business model of BDL and its ability to scale up its revenues and order book in current scenario, however, with fair valuations, analysts said they would look for lower price points to enter the stock. Currently, BDL is trading below MOFSL target price of ₹1,900 per share.
Bharat Dynamics is a prominent player in missile technology within the defence sector and has established itself as a leading integrator for various missile platforms. With a focus on developing advanced guided missiles, underwater weapons, and airborne products, BDL currently holds an order book of ~₹22,700 crore and a prospect pipeline of ₹50,000 crore. In recent years, BDL's revenue has been adversely impacted by supply chain disruptions and difficulties in procuring essential components through imports from Russia and Israel.
However, these issues are beginning to resolve, and analysts anticipate a rebound in revenue growth. Along with this, MOFSL also expects the company to benefit from upcoming emergency procurement pipeline as well as large orders such as quick reaction surface-to-air missiles (QRSAM).
Meanwhile, analysts at Elara Capital downgraded BDL to Sell with a target price of ₹1,480 on 400-600bp lower-than-estimated margin as the current price already factors in all the positives and it has outperformed the Nifty in the recent past.
The brokerage firm lowered its FY26E EPS by 17 per cent and FY27E EPS by 8 per cent on Akash missile execution from FY26 vs assumption in FY25, lower-than-expected margin in FY25 with likely less scope for further improvement. Analysts expect an earnings compounded annual growth rate (CAGR) of 46 per cent during FY25-28E with an average ROE of 24 per cent during FY26-28E. 'We are yet to factor in exports inflows as there is uncertainty on the order finalization timeframe, and this would be a catalyst to monitor,' the brokerage firm said.
'BDL's earnings before interest, taxes, depreciation, and amortization (EBITDA) margins are likely to be in the range of 16-18 per cent during FY26-27E as missile systems are largely indigenized. Revenue CAGR may grow by 30 per cent plus during FY25-27E (our est. CAGR of 39 per cent), driven by strong execution of ₹22,100 crore order book as on March 2025. The recent conflict highlighted product quality and combat mettle of BDL's product portfolio and would open various export opportunities,' Elara Capital said in the company update.
Meanwhile, BDL in its FY24 annual report said that slowdown in the economic activities and lower defence budget by Government of India (GoI) could adversely impact the company's business. Higher dependency on single customer i.e. Ministry of Defence (MoD), cancellation of orders can weaken the order book and future revenue and opening up of the Defence sector are some threats for the company.