ICICI Direct Expects 30% Revenue, EBITDA and Profit CAGR at Bharat Dynamics Through FY31
Key Takeaways
- •ICICI Direct expects Bharat Dynamics to achieve a 30% CAGR in revenue, EBITDA and profit through FY31.
- •The brokerage bases its conviction on a sharp execution recovery at BDL, supported by the resumption of Akash missile deliveries and fresh anti-tank guided missile orders.
- •Bharat Dynamics reported multi-fold profit growth and more-than-doubled revenue in its most recent first quarter.
- •India's positive indigenisation lists under the 'Make in India' push restrict imports of specified defence platforms and have expanded order visibility for domestic defence PSUs.
- •Key metrics analysts will track in coming quarters include Akash delivery pace, ATGM order conversions, order book replenishment and margin performance.
ICICI Direct has identified a sharp execution recovery at Bharat Dynamics Ltd (BDL) as the central driver of its confidence in the defence public sector undertaking, with the resumption of Akash missile deliveries and fresh anti-tank guided missile (ATGM) orders acting as additional catalysts.
The brokerage, the retail broking arm of ICICI Securities, expects the company to record a compound annual growth rate (CAGR) of 30% in revenue, EBITDA and profit through FY31.
Bharat Dynamics, incorporated in 1970 and headquartered in Hyderabad, operates under India's Ministry of Defence. The company manufactures guided missiles and allied equipment for the Indian armed forces, including the Akash surface-to-air missile system and a portfolio of anti-tank guided missiles. Its shares are listed on India's national stock exchanges.
BDL sits within a broader state-led push to indigenise India's defence production. Under the government's 'Make in India' and self-reliance initiatives, so-called positive indigenisation lists restrict the import of specified defence platforms and steer procurement toward domestic manufacturers, a policy backdrop that has expanded order visibility for the country's defence PSUs. BDL is one of several such state-owned manufacturers now listed on Indian exchanges, alongside Hindustan Aeronautics, Bharat Electronics, Mazagon Dock and Cochin Shipyard, which together have drawn heightened investor attention as domestic order flows to the sector have grown.
The brokerage's assessment follows the company's recent quarterly performance. CNBC-TV18 separately reported that Bharat Dynamics' first-quarter profit jumped multi-fold while revenue more than doubled (Bharat Dynamics Q1 results).
For a company whose outlook hinges on execution, the key factors analysts track in coming quarters include the pace of Akash missile deliveries, the conversion of the ATGM order pipeline into booked contracts, replenishment of the order book and margin performance as production scales.
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Source: CNBC-TV18
