Midcap Defence PSU Stock Jumps 371% In 3 Yrs, Board Recommends Dividend, Buy, Says ICICI Direct

ICICI Direct places a Buy on Bharat Dynamics Ltd. (BDL) with a target price of Rs. 1,230 apiece. According to the given target price, the stock has the potential to give a decent return of 17% if the stock is purchased at the current market price. BDL is a Miniratna category Midcap PSU stock. It has a market capitalisation of Rs. 19,276.61 crore.

The Board of Directors of the company in their held on 22 May 2023 recommended a final dividend at Rs 1.20/share for the financial year ended 31st March 2023.

Recommends Final Dividend

In a regulatory filing, the Board of Directors of the BDL said, "the Board of Directors of the Company have recommended a final Dividend @ Rs 1.20 per share (face value of Rs.10/-each) for the year ended 31.03.2023. This Dividend upon approval by the shareholders at the ensuing Annual General Meeting (AGM) will be paid within 30 days from the date of AGM."

Q4FY23 Results

According to ICICI Direct, Execution remained weak on account of a delay in supplies. Revenue declined 42.2% YoY to Rs. 798.3 crore; primarily on supply delays. Sequentially, revenue increased 73% as execution picked up QoQ. The EBITDA margin contracted 628 bps YoY to 23%. EBITDA declined 54.6% YoY to Rs. 183.4 crore. PAT declined 40.2% YoY to Rs. 152.8 crore.

Buy for a Target Price of Rs. 1230/share

ICICI Direct said, "We expect BDL to deliver revenue, EBITDA CAGR of 40.5%, 66.8%, respectively, in FY23-25E. PAT is likely to grow at 56.8% CAGR (FY23- 25E). We maintain our BUY rating on the stock. We value BDL at Rs. 1230 on 26x P/E on FY25E EPS basis."

Stock Outlook - Current Market Price & Returns

On Friday, the stock of Bharat Dynamics closed 4.42% higher at Rs. 1,051.75 apiece. The stock traded the new 52 week high on 17 May 2023 at Rs. 1,104.95 apiece, while it traded its 52 week low on 20 June 2022 at Rs. 647.60 apiece.

It declined 0.44% in 1 week. In 1 month, it jumped 6.99% and in 3 months, it jumped 9.76%. It has given 41.88% positive return in 1 year. It gave 371.11% multibagger return in 3 years, whereas, it gave 174.47% positive return in 5 years.

About - Bharat Dynamics Ltd. (BDL)

Bharat Dynamics (BDL) is one of the leading defence PSUs in India engaged in the manufacture of surface to air missiles (SAMs), anti-tank guided missiles (ATGMs), air to air missiles (AAMs), underwater weapons, launchers, countermeasures and test equipment. Revenue from operations has increased at 14.1% CAGR in FY21-23. EBITDA and PAT have grown at a CAGR of 8.8% and 16.9%, respectively, over the same period. Order book was at Rs. 24021 crore as of March 2023 end.

Disclaimer - The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.