Bharat Dynamics Limited is one of the leading defence PSUs in India which is engaged in the manufacturing of Surface to Air missiles (SAMs), Anti-Tank Guided Missiles (ATGMs), Underwater weapons, Launchers, Counter Measures Dispensing System (CMOS) and Test Equipment.  The Company is also engaged in the business of refurbishment and life extension of stored and deployed missiles. It is the sole manufacturer in India for SAMs, torpedoes, ATGMs and sole supplier of SAMs and ATGMs to the Indian Armed Forces. The Company currently has three manufacturing facilities located in Hyderabad, Bhanur, and Vishakhapatnam. The Hyderabad manufacturing unit manufactures SAMs, Milan 2T ATGMs, countermeasures, launchers, and test equipment. The Bhanur unit is engaged in the manufacturing of the Konkurs - M ATGMs, the INVAR (3 UBK 20) ATGMs, launchers and spares and the Vishakapatnam unit is engaged in the manufacture of lightweight torpedoes, the C-303 anti-torpedo system, countermeasures, and spares. The Company is also setting up two additional manufacturing facilities at Ibrahimpatnam (near Hyderabad) and Amravati in Maharashtra which shall be used to manufacture SAMs and Very Short-Range Air Defence Missiles (VSHORADMs) respectively. Recently it has the Warhead Manufacturing Facility at Bhanur Unit, the Radio Frequency (RF) Seeker Facility at the Kanchanbagh Unit, and the Central Storage Facility at Visakhapatnam Unit. Besides these new facilities like SMD line and High Computing facilities were also set up by the company and it has signed a contract with M/s Airbus Defence and Space, Spain for development and supply of CMDS for C-295 Aircraft.

Company’s products portfolio includes AKASH Weapon System a Short Range Surface to Air Missile System, ASTRA Weapon System - an indigenously developed Air - to - Air Beyond Visual Range missile, Smart Anti - Air Field Weapon (SAAW) - long range, standoff, precision air-to-surface weapon, HELINA (DHRUVASTRA) - an abbreviation for Helicopter launched NAG and is an Air to Surface Missile system, Man Portable Anti - Tank Guided Missile or M P ATGM, Amogha-III - a third generation fire-and-forget Anti-Tank Guided Missile, NAG ATGM - a third generation Anti-Tank Guided Missile, KONKURS – M ATGM - a Second Generation, mechanized infantry ATGM, LIGHT WEIGHT TORPEDO - a state-of - art underwater weapon, HEAVY WEIGHT TORPEDO (VARUNASTRA) - an advanced state-of-the-art, ship launched heavy weight, anti-submarine Torpedo, COUNTER MEASURES DISPENSING SYSTEM (CMDS) - a state of the art Flare and Chaff Dispensing System and Anti - Submarine Warfare Suite (ASW Suite).  Company spends 2% to 4% of Sales for its R&D (FY 23: spent 6.11% of sales).  As part of BDL’s diversification plan, company has identified new verticals such as guided bombs, drone-delivered payloads, warhead manufacturing, products for space applications and propellants. Recently company’s consolidated order book position has reached a staggering figure of Rs 24,021crore approx. Company has received its highest-ever export order of USD 255.4 million for SAMs and USD 27 million for ATGMs from friendly foreign countries and as of April 1, 2023, the total export order book of BDL stands at ₹2586 Crore, reflecting the growing success in the international market.

Fundamentals (FY22-23):

Financial Results:

Company’s Net Sales was Rs 615.81 crore in September 2023 up 15.15%, Quarterly Net Profit at Rs. 147.09 crore in September 2023 up 94.02% and EBITDA stands at Rs. 212.33 crore in September 2023 up 52.91% as compared to September 2022. Company’s EPS has increased to Rs. 8.03 in September 2023 from Rs. 4.14 in September 2022.

Key Points:

1. Company recently supplied the indigenously developed and manufactured Astra Missiles to the Indian Air Force. Astra is a Beyond Visual Range Air-to-Air Missile indigenously developed by DRDO and manufactured by BDL for the Indian Air Force. It is best in its weapon class systems in the world in the category of Air-to-Air missiles with a range of 100 + km.
2. Company has recently signed a contract for Rs 8161crore with the Ministry of Defence, Govt. of India for production and supply of Akash Weapon System to the two regiments of Indian Army.
3. Further, BDL also received an order of Rs 261 Crore for CMDS for MLH Helicopters.
4. BDL has received several orders for supply of various systems which includes Astra MK-I Air to Air Missile (AAM) and associated equipment for the Indian Air Force  and  Indian  Navy.
5. BDL has entered into Licensing Agreement for Transfer of Technology (LAToT) with DRDO for manufacturing of Ceramic Radomes (GELCAST Process).
6. Recently during Aero India –2023 at Bengaluru, the company has launched three new products which includes Vertical Launched –Short - Range Surface-to-Air Missile or VL SR SAM, Semi-Active Laser Seeker Homing Anti-Tank Guided Missile for BMP –II and Drone Delivered Missile (JISHNU).
7. Bharat Dynamics Limited (BDL) and Dassault Aviation Pvt Ltd have entered into an MoU for Integration of BDL Weapon Systems like  Astra  &  Smart  Anti-Airfield  Weaponon  RafaleAircraft for Indian Armed Forces and future export market.
8. BDL and IIT, Ropar have entered MoU to work on joint research projects and technology development for all missiles and underwater weapons.
9. BDL has also signed MoU with other organizations which includes Ashok Leyland Defence Systems Limited, Mahindra Defence Systems, Newspace Technologies etc at Defence Expo.
10. BDL has also started manufacturing of state-of-the-art VSHORADS (Very Short Range Air Defence System), Laser Beam Riding Munitions under TOT agreement with Thales UK under  the ‘Make  in  India’ scheme for Indian Armed Forces.
11. Company has also signed MOUs with several foreign OEMs which includes MBDA, France for manufacturing of Mistral Missiles at  BDL, Dassault Aviation Pvt Ltd for Integration of Weapon Systems like Astra & SAAW on  Rafale Aircraft, Thales Belgium for setting up manufacturing facilities for Laser Guided Rocket  and  its  major  components  in  India.
12. It has also signed MOUs with Barij Dynamics LLC (“AL TARIQ”), Abu Dhabi, United Arab Emirates to identify and work on Potential Projects of Al Tariq for manufacture in India, for India and for the world and with BULTEXPRO LTD, Bulgeria for 122mm GRAD BM ER and NON ER rockets in India.
13. Bharat  Dynamics  Limited  (BDL) and  Indian  Army have signed  a contract worth Rs 3,131.82 Crore for  manufacture  and  supply  of Konkurs-M Anti-Tank Guided Missiles to the Indian Army which are manufactured under license agreement with a Russian OEM.

In last 3 Years the stock gave a return of 404.82% as compared to the rise of Sensex and Nifty in the same period.

Company’s future products for upcoming years under in-house R&D includes AMOGHA III ATGM, Drone Fired Missile, Drone Fired 3.5 Kg Bomb and Drone Fired 1 Kg Bomb and its Foreign Collaboration programs includes LBRM, MISTRAL, ASRAAM, SPIKE ER2, 122 mm GRAD ROCKETS and 70MM LGR. Company has also planned certain future programs in association with DRDO which includes QRSAM, AKASH NG SAM, VLSRSAM, DHRUVASTRA/HELINA ATGM, NAG ATGM, MPATGM, LRLACM, SAAW (Smart Anti Air Field Weapon), Electrical Heavy Weight Torpedo, Advanced Light Weight Torpedo, MIGM (Multi Influence Ground Mines), SONOBUOY and ULPGM.

Company has also signed many MOUs with different domestic as well as international OEMs which will usher new   opportunities   for   growth and bring new technologies into the company and help the company to develop a growing revenue stream through upcoming domestic and international orders. As per reports, Defence sector is expected to post revenue and earnings CAGR of 16 % and 13 %, respectively in upcoming year and BDL is well poised to benefit from this growth. Mutual Fund houses has increased their holdings by 0.87% to 9.28in the last quarter. Considering Govt’s push for ‘Make in India’ and ‘Atmanirbhar Bharat’ campaign to boost Indian defence strength, healthy order book position of the company, monopoly in certain defence products and good financial positions investors can easily park their funds in this company for long term period and that too with a buy in dips strategy.

HET ZAVERI

info@smartinvestment.in

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