BDL shares surge 3% after Q1 PAT soars 154% YoY. Should you buy now?

Bharat Dynamics Ltd (BDL) shares jumped 3.2% to the day’s high of Rs 1,534 on BSE on Wednesday after the company reported an exceptional set of numbers for the first quarter of FY26. The defence PSU posted a massive 154% year-on-year (YoY) surge in profit after tax (PAT) to Rs 18.35 crore, sharply higher than Rs 7.21 crore in Q1FY25.

Revenue from operations rose 23.07% YoY to Rs 231.09 crore from Rs 187.77 crore, while total income registered a healthy 23.29% YoY increase to Rs 334.79 crore from Rs 271.55 crore.

On the cost front, total expenses stood at Rs 311.66 crore, up 19.72% YoY from Rs 260.31 crore.

Here’s what brokerage firms are saying:

Nuvama: Buy | Target price: Rs 2,250

Nuvama has maintained its Buy rating on BDL with a target price of Rs 2,250. The brokerage projects a revenue compound annual growth rate (CAGR) of around 51% and an earnings per share (EPS) CAGR of 66% over FY25–28. Operating margin (OPM) is expected to remain in the 23–23.5% range, supported by easing supply constraints in critical imports. Nuvama has assigned a 45x price-to-earnings (P/E) multiple on FY27E EPS of Rs 50.1. It noted that supply chain disruptions caused by dependence on war-affected nations are now easing, positioning BDL to deliver strong growth momentum in the coming years.

Motilal Oswal: Buy | Target price: Rs 1,900

Motilal Oswal has upgraded BDL from Neutral to Buy, with a target price of Rs 1,900, citing valuations now seen as reasonable. The company has a strong order book of Rs 23,300 crore, with execution expected to accelerate in the coming quarters. It also holds a large prospect pipeline worth Rs 50,000 crore, which is likely to drive future growth. MOSL has maintained its estimates, anticipating improvements in execution and margins ahead. Revenue and EBITDA are projected to grow at a CAGR of 35% and 64%, respectively, over FY25–28. EBITDA margins are forecast at 23.8% for FY26, 24.7% for FY27, and 25.5% for FY28. The stock currently trades at 39x FY27E and 29x FY28E EPS.

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(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)