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Business Standard
6 days ago
- Business
- Business Standard
What's firing up Bharat Dynamics? 8 reasons behind MOFSL's positive view
MOFSL on Bharat Dynamics: Ammunition and missile systems manufacturers Bharat Dynamics Limited (BDL) shares were in focus on Thursday, July 10, 2025 after Motilal Oswal Financial Services (MOFSL) initiated coverage on the stock. On the bourses, however, Bharat Dynamics' share price fell 2.53 per cent to an intraday low of ₹1,934.80. Around 9:50 AM, the Bharat Dynamics share was trading 1.60 per cent lower at ₹1,953.30 per share, while the benchmark BSE Sensex was down 0.12 per cent at 83,434.31 levels. MOFSL today initiated coverage on Bharat Dynamics with a 'Neutral' rating and a target price of ₹1,900, indicating a downside of 4 per cent from current levels. 'The stock currently trades at 70x/52x/38x P/E on FY26/27/FY28 estimates. We initiate coverage on the stock with a 'Neutral' rating and a target price (TP) of ₹1,900 based on 42x September'27E P/E,' Teena Virmani and Prerit Jain, research analysts at MOFSL said, in a note dated July 10. Motilal Oswal analysts said that they like Bharat Dynamics' business model and strong growth potential but would prefer lower entry points given current valuations. They also flagged risks including any potential cut or reprioritisation in India's defence budget, contract cancellations or failures, changing procurement rules, and supply chain disruptions. Meanwhile, here are the 8 key reasons behind MOFSL's coverage initiation: Rising global spend boosts Indian defence According to MOFSL, NATO's recent commitment to raise defence spending to 5 per cent of GDP by CY35 has strengthened the outlook for global defence players, with indirect positive implications for India. This, analysts believe, could lead to India boosting its own defence budget and create new export opportunities for domestic players. Additionally, India's own emergency procurement drive and the Defence Acquisition Council's (DAC) recent approvals worth ₹1 trillion are expected to considerably expand the addressable market for companies like BDL. Positive industry tailwinds The company's estimated addressable market size is around ₹50,000 crore, driven by missile procurements across platforms including submarines (Project 75I), fighter jets (LCA Tejas Mk1A, Su-30MKI), and helicopters (LCH Prachand, ALH Dhruv). Continued demand for systems like QRSAM, MRSAM, NAG, and VSHORAD, alongside existing long-term contracts for high-value imports like S-400 and Barak-8, analysts highlighted, are expected to fuel growth. Export demand, especially for Akash missile systems, will also support order inflow. Emerging as a leading integrator of missile platforms MOFSL said Bharat Dynamics has transformed from a missile manufacturer into an end-to-end weapon systems integrator for the Army, Navy, and Air Force. It is expanding into drone-delivered payloads, guided bombs, warhead and engine manufacturing, and other segments such as mines and propellants. The company is actively exploring new partnerships with foreign original equipment manufacturers (OEMs) and continues to work closely with DRDO on a range of high-impact defence programs. Strong order book, easing supply chain issues to scale up revenue As of FY25-end, the missile maker's order book stood at ₹22,700 crore, registering a healthy compound annual growth rate (CAGR) of 27 per cent over FY20–24, driven by large deals related to Akash, Konkur, and exports. While supply chain bottlenecks due to the Russia-Ukraine conflict and regional geopolitical tensions in Israel had earlier impacted revenue conversion, MOFSL noted that these issues have begun to ease. With execution expected to normalise, the company is now projected to deliver a 35 per cent revenue CAGR over FY25–28. Focus on indigenisation Bharat Dynamics has been consistently localising its platforms, with import dependence falling majorly over the years. The company now achieves 80–90 per cent indigenisation on several missile systems, which boosts its ability to compete independently in domestic tenders. As a key development partner to DRDO for about 40 projects, BDL is well-positioned to capitalise on indigenous defence production as more projects move into the manufacturing phase. Continuous capacity growth, research efforts to minimise reliance on imports The company has expanded its in-house production capabilities with new facilities like the integrated Radio Frequency Seeker Unit at Kanchanbagh, aimed at producing and testing critical missile components. It is also increasing its capacity to manufacture next-gen SAMs, VSHORAD rockets, ATGM propellants, and more. R&D spending has risen sharply over the past two years, with ongoing efforts in both new product development and upgrading legacy systems to meet emerging operational requirements. Boosting exports BDL's export momentum has picked up sharply following government approvals for Akash system exports to nine countries. Export revenues rose to ₹1,200 crore in FY25 from ₹160 crore in FY24. The company's growing global portfolio includes Akash (SAM), Astra (Air-to-Air), Helina (Air-to-Surface), anti-airfield weapons, various torpedoes, and anti-tank missiles such as Konkurs-M and Milan-2T. Lightweight torpedoes have already been exported, and other products are seeing increasing interest globally. Strong financial outlook MOFSL projects a 35 per cent revenue CAGR and 51 per cent PAT CAGR for BDL over FY25–28, driven by improved execution and easing supply chain margins are expected to strengthen from 23.8 per cent in FY26 to 25.5 per cent by FY28, aided by indigenisation and lower provisioning. With a steady capex of ₹200–300 crore annually and efficient working capital management, the company's return on equity (RoE) and return on capital employed (RoCE) are projected to rise to 25.2 per cent and 25.6 per cent, respectively, by FY28.
Time of India
6 days ago
- Science
- Time of India
PM's principal secy reviews indigenous projects at HAL
Bengaluru: PK Mishra, principal secretary to the Prime Minister, visited the facilities of defence PSU Hindustan Aeronautics Limited in Bengaluru and reviewed progress of key indigenous defence and space programmes. Mishra visited Aircraft Research & Design Centre (ARDC) and toured LCA Mk 2 hangar. He then went to LCA Tejas assembly hangar and the aerospace division, where he was briefed on the ongoing production of LCA Tejas Mk 1A. HAL displayed six LCA Mk 1A fighters and two LCA Mk 1 trainers during the visit. At the aerospace division, Mishra toured LVM-3 and PSLV assembly lines, the cryogenic engine manufacturing facility, and reviewed HAL's contributions to Gaganyaan mission. You Can Also Check: Bengaluru AQI | Weather in Bengaluru | Bank Holidays in Bengaluru | Public Holidays in Bengaluru
Time of India
7 days ago
- Business
- Time of India
PM's principal secretary reviews key indigenous projects at HAL
Bengaluru: , principal secretary to the prime minister, visited defence PSU Hindustan Aeronautics Limited (HAL) facilities in Bengaluru on Tuesday and reviewed progress on several key indigenous defence and space programmes. Tired of too many ads? go ad free now 'The visit was led by HAL CMD DK Sunil, with other board members present. Mishra began the visit at the Aircraft Research & Design Centre (ARDC), where he toured the LCA Mk 2 hangar,' HAL said late on Tuesday. Mishra then proceeded to the LCA Tejas assembly hangar and the aerospace division, where he was briefed on the ongoing production of the LCA Tejas Mk 1A. HAL displayed six LCA Mk 1A fighters and two LCA Mk 1 trainers during the visit. 'HAL presented a range of indigenous platforms to the visiting official, including the Prachand light combat helicopter, Light Utility Helicopter (LUH), Dhruv advanced light helicopter, and the HTT-40 basic trainer aircraft. The organisation reaffirmed its readiness to lead collaborative, multi-stakeholder programmes in the future,' the PSU said. PK Mishra at HAL, Bengaluru At the aerospace division, Mishra was received by Isro chairman V Narayanan. He toured the LVM-3 and PSLV assembly lines, the cryogenic engine manufacturing facility, and reviewed HAL's contributions to the Gaganyaan mission. PK Mishra at HAL, Bengaluru 'He was also briefed on HAL's recent selection for the Small Satellite Launch Vehicle (SSLV) technology transfer programme. Mishra commended HAL's role in advancing India's self-reliance in defence and aerospace,' HAL added.
India Gazette
09-07-2025
- Business
- India Gazette
Karnataka: Principal Secretary to PM visits HAL; reviews key indigenous projects
Bengaluru (Karnataka) [India], July 9 (ANI): Principal Secretary to Prime Minister P K Mishra visited the Hindustan Aeronautics Limited (HAL) and reviewed key indigenous projects, as per a release. DK Sunil, CMD of HAL, led the visit, along with other HAL Board members, on Tuesday. Mishra commenced his visit with a tour of the LCA Mk 2 hangar at the Aircraft Research and Design Centre (ARDC), followed by a visit to the LCA Tejas Assembly Hangar and Aerospace Division. At the LCA Tejas Division, he reviewed the progress of the LCA Tejas Mk 1A program and was briefed on the current production progress. HAL showcased six LCA Mk 1A fighters and two LCA Mk 1 trainers during the visit. HAL reaffirmed its commitment and preparedness to lead multi-stakeholder programs in the future to the visiting dignitary. Earlier on June 16, Misra conducted site inspections and high-level review meetings in Dholera and Lothal in Gujarat, assessing key infrastructure projects on Monday. These projects are aligned with Prime Minister Narendra Modi's vision for industrial and economic growth, according to a release by PMO. According to the release, Mishra visited the under-construction Ahmedabad-Dholera Greenfield Expressway, implemented by the National Highways Authority of India (NHAI). He highlighted the expressway's potential to reduce travel time between Ahmedabad and Dholera to 45 minutes and emphasised timely execution with global-quality road standards. At Dholera Special Investment Region (DSIR), Mishra assessed the progress of Dholera International Airport. Officials informed him that cargo operations would commence by October 2025. He directed authorities to adhere to timelines and ensure seamless connectivity with the expressway. The Principal Secretary to PM inspected Tata Electronics' Semiconductor Fabrication (Fab) project, a flagship initiative in domestic chip manufacturing. He reviewed its production scope, including chips for mobile devices, consumer electronics, and automotive applications. He also visited social infrastructure projects--schools, hospitals, and residential complexes--developed by Dholera Industrial City Development Limited (DICDL). He emphasised user experience, calling for stakeholder feedback integration. Mishra also chaired a comprehensive review meeting with senior officials from DICDL, DIACL, NHAI, Airports Authority of India, and Indian Railways. He reviewed key projects, including Ahmedabad-Dholera Expressway, Bhimnath-Dholera Freight Rail Link, Ahmedabad-Dholera Semi-High-Speed Rail Line, Dholera International Airport. Mishra reiterated the Government of Gujarat's commitment to Dholera's development as a global-standard smart industrial city. He stressed the importance of timely project completion, skilled workforce availability, and robust planning, the release added. (ANI)
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Business Standard
06-07-2025
- Business
- Business Standard
The case for a second fighter jet maker in India isn't compelling: HAL CMD
Hindustan Aeronautics CMD D K Sunil says the aerospace major is leveraging private-sector partnerships to boost production capacity and address the IAF's concerns over depleting squadron strength premium Bhaswar Kumar New Delhi Listen to This Article Bengaluru-headquartered Hindustan Aeronautics Limited (HAL), a Maharatna public sector undertaking under the Ministry of Defence and India's largest defence company by revenue, order book size, and market capitalisation, has faced sustained criticism from the Indian Air Force (IAF) over delays in the LCA Tejas Mk1A programme. The original February 2024 deadline for the start of deliveries was missed, even as the IAF grapples with declining squadron strength amid a volatile neighbourhood that recently saw it carry out deep strikes into Pakistan during Operation Sindoor. HAL is also pursuing a follow-on order for the Mk1A, after the initial Rs 36,000 crore
