Buy Bharat Dynamics, target price Rs 1070: ICICI Direct

ICICI Direct has buy call on Bharat Dynamics with a target price of Rs 1070. The current market price of Bharat Dynamics is Rs 830.4. Time period given by analyst is one year when Bharat Dynamics Ltd. price can reach defined target.

Bharat Dynamics Ltd., incorporated in the year 1970, is a Mid Cap company (having a market cap of Rs 15209.59 Crore) operating in Defence sector.

Bharat Dynamics Ltd. key Products/Revenue Segments include Engineering Goods, Spares And Others, Other Operating Revenue, Job Work, Sale of services, Miscellaneous and Scrap for the year ending 31-Mar-2021.



Financials
For the quarter ended 30-06-2022, the company reported a Standalone Total Income of Rs 731.56 Crore, down -48.11 % from last quarter Total Income of Rs 1409.77 Crore and up 368.37 % from last year same quarter Total Income of Rs 156.19 Crore. Company reported net profit after tax of Rs 39.86 Crore in latest quarter.

Investment Rationale
The brokerage expects BDL to deliver revenue and EBITDA CAGR of 28.8% and 26.8%, respectively, in FY22-24E. PAT is likely to grow at 25.1% CAGR (FY22-24E). Increase in profitability with strong asset turnover is expected to result in healthy return ratios over FY23-24E. It remains positive on BDL with a BUY rating and target price of Rs 1070 (valuing at 25x P/E on FY24E EPS).

Promoter/FII Holdings
Promoters held 74.93 per cent stake in the company as of 30-Jun-2022, while FIIs owned 2.4 per cent, DIIs 14.58 per cent.