Bharat Dynamics Limited

Industrials — Aerospace & Defense · NSE

₹1,114.70−₹11.60 (−1.03%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Low

Driven by a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of Bharat Dynamics Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Bharat Dynamics Limited manufactures and sells guided missiles, underwater weapons, air-borne products, and allied defense equipment in India.

IndustryAerospace & Defense

SectorIndustrials

Employees2,101

Annual revenue₹2,415 Cr

How does it make money?

Turns over ₹2,415 Cr a year. Of every ₹100 of sales, about ₹17 reaches shareholders as profit, with ₹27 left at the operating level before interest, tax and depreciation. Each of its 2,101 employees supports ₹1.15 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.15 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 7.2% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE15.2%

What is the outlook?

16 analysts covering the stock expect revenue to grow about 36.6% and earnings to grow about 38.8% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+36.6%

Est. earnings growth+38.8%

Analysts16

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -3% while net margin moved +23% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-3%

Margin effect+23%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 0.9% a year
✗ Profit CAGR of only 6.1%

Quality vs. Valuation

Company Quality

59/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

40/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

78.4x

3Y Median

91.3x

40 monthly readings · mean 91.5x · range 50.7x–166.1x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 14% below its 3y median of 91.3x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 88.8x.

vs. its own history

Fair

91.3x median over 40 months · -14%

vs. sector peers

Fair

88.8x median of 3 peers · -12%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

62.0x

PEG

12.91

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 22.6% to 26.7% over 3 years.
Debt is being paid down
Total debt is down 94% over 3 years.
Very low debt
Debt/Equity of 0.01x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 2 high

🔴Receivables growing faster than salesFinancial
Receivables up 129% against revenue up -3% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 154% against revenue up -3% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 22.6% to 26.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 94% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹375 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 129% against revenue up -3%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 25%✓ 26.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹375 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 7.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 91.3x✓ 78.4x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹40,861 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

78.4x

Expensive

Expensive — verify against sector peers

P/B Ratio

9.63x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹14.21

Profitable

Profitable on a per-share basis

ROE

9.9%

Moderate

Moderate capital efficiency

ROCE

7.2%

Weak

Low return on total capital employed

Debt/Equity

0.01x

Low

Conservative leverage

Revenue Growth (YoY)

130.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

548.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.44%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹375 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

36.7x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

11.0%

Average

Average margins

Net Margin

18.8%

Good

Strong bottom-line conversion

Current Ratio

2.01

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.32

Defensive

Steadier than the market

52W Range Position

11%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

1119.4 / 1221.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

45.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,479 Cr	₹2,359 Cr	₹3,323 Cr	₹2,415 Cr	-0.9%
EBITDA	₹561 Cr	₹896 Cr	₹820 Cr	₹645 Cr	+4.8%
EBITDA Margin	22.6%	38.0%	24.7%	26.7%	—
PAT (Net Profit)	₹352 Cr	₹613 Cr	₹550 Cr	₹420 Cr	+6.1%
EPS	₹9.61	₹16.72	₹14.99	₹11.47	+6.1%
ROE	11.0%	16.8%	13.7%	9.9%	—
ROCE	7.5%	11.3%	10.2%	7.2%	—
Total Debt	₹5 Cr	₹4 Cr	₹2 Cr	₹0 Cr	-60.7%
Free Cash Flow	₹2,022 Cr	₹331 Cr	-₹115 Cr	₹375 Cr	-43.0%

🟡 Revenue has been broadly flat over 3 years (-0.9% a year).

🟢 EBITDA has grown at 4.8% a year over 3 years.

🟢 EBITDA Margin has risen from 22.6% to 26.7% over 3 years (+4.1 pts).

🟢 PAT (Net Profit) has grown at 6.1% a year over 3 years.

🟢 EPS has grown at 6.1% a year over 3 years.

🔴 ROE has fallen from 11.0% to 9.9% over 3 years (-1.1 pts).

🟡 ROCE has held roughly flat at 7.2% over 3 years.

🟢 Total Debt has shrunk at 60.7% a year over 3 years.

🔴 Free Cash Flow has shrunk at 43.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹14,261 Cr

Total Liabilities

₹10,021 Cr

Cash & Equivalents

₹863 Cr

Operating Cash Flow

₹604 Cr

Capex

-₹229 Cr

Shareholding (proxy)

Institutional Holding

10.7%

Insider Holding

74.9%

Corporate Actions

Next Earnings

12 Nov 2026

Dividend Rate

₹4.9

Ex-Dividend Date

21 Sept 2026

Analyst Consensus

Recommendations

7 Buy · 5 Hold · 4 Sell

Target Price (Mean)

₹1,331.38

+19.4% vs CMP

Target Range

₹1,050 – ₹1,610

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

1 positive3 mixed2 general

Bharat Dynamics Wins ₹1,307 Crore Navy Order; Shares Rise 0.13%

HDFC Sky, 15 OctOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

Where Will Bharat Dynamics Share Price be in the Next 5 Years?

Equitymaster, 25 Sept

BDL Missile Pipeline Boosts Bharat Dynamics share price target

Alice Blue, 08 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Bharat Dynamics Ltd. Share Price Rise Streak, BDL gains

Univest, 12 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Will BDL, HAL & other defence stocks deliver rocketing returns? Here’s why this brokerage remains bullish

The Economic Times, 04 SeptAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Defence stocks to buy: HAL, Bharat Dynamics, MIDHANI are DAM Capital's top picks with up to 39% upside - check targets

Livemint, 14 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Risk

MiddlingProfitability

WeakGrowth · Valuation

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — ROCE stays above 8% · see Key things to watch ↑