1. At a Glance
Bharat Dynamics Ltd (BDL) is India’s crown jewel in guided missile production. A PSU under the Ministry of Defence, it’s got missiles, margins, and MOUs—yet also comes with painfully slow sales growth and a PE of 122 that screams, “Price me like a SaaS startup!”
2. Introduction with Hook
Imagine this: You manufacture actual missiles. You’re one of the few entities in the country licensed to literally build tools of destruction. Yet your biggest pain point isn’t geopolitical tension—it’s… sales growth.
- FY25 revenue: ₹3,345 Cr
- Net profit: ₹550 Cr
- ROCE: 20% (Solid!)
- Stock P/E: 122 (Yikes!)
This is the paradox of Bharat Dynamics Ltd, where every AGM includes both defense secrets and balance sheet apologies.
3. Business Model (WTF Do They Even Do?)
BDL is in the business of:
- Missiles (Akash, Milan-2T, Konkurs-M, etc.)
- Torpedoes (Underwater weapon systems)
- Countermeasure dispensing systems
- Lifecycle support, refurbishments for older military stock
- They also export and collaborate with DRDO and other defence R&D orgs.
Basically: if it blows up or prevents other stuff from blowing up—you’ll find BDL’s name on it.
4. Financials Overview
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM (%) | ROE (%) |
|---|---|---|---|---|
| FY21 | 1,914 | 258 | 18% | 7.0% |
| FY22 | 2,817 | 500 | 26% | 13.6% |
| FY23 | 2,489 | 352 | 16% | 9.6% |
| FY24 | 2,369 | 613 | 23% | 16.7% |
| FY25 | 3,345 | 550 | 14% | 14.9% |
Pattern: Order lumpiness + margin swings = typical defense PSU heartbreak.
5. Valuation
With a PE of 122, BDL is being priced like it’s Tesla + Lockheed + DRDO.
Valuation Models:
- Peer Median PE (Astra, Zen, HAL): 55–65
- Fair EPS (₹15–17) ⇒ FV Range: ₹825 – ₹1,105
- Current Price (₹1,824) = Priced for war, not peace.
Verdict: Overbaked unless order execution skyrockets.
6. What’s Cooking – News, Triggers, Drama
- Jun 2024: ₹1,777 Cr revenue reported in Q4—massive jump YoY
- SEBI fines in May 2025 for non-compliance. PSU tradition.
- Defence Expo orders & exports pipeline growing
- Investor Call Transcript (Nov ’24): Mgmt hints at AI-enabled missile systems. No, really.
Drama Level: Moderate. Triggers tied to defence budgets + execution.
7. Balance Sheet
| Item | FY25 (₹ Cr) |
|---|---|
| Equity | 183 |
| Reserves | 3,826 |
| Borrowings | 2 |
| Total Liabilities | 11,742 |
| Fixed Assets | 970 |
| CWIP | 117 |
| Investments | 4 |
| Other Assets | 10,651 |
Key Points:
- Negligible debt
- Hefty asset base, mostly gov receivables
- Net worth: ₹4,009 Cr
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Flow |
|---|---|---|---|---|
| FY23 | 2,130 | -1,171 | -171 | +788 |
| FY24 | 412 | -722 | -148 | -459 |
| FY25 | 167 | -407 | -220 | -460 |
Bottom Line: Defence PSUs operate like delayed payment contractors. CFO volatility is expected.
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROCE | 20% |
| ROE | 14.9% |
| Debtor Days | 90 |
| Inventory Days | 575 |
| CCC | 338 |
Takeaway: CCC is a battlefield. But efficiency ratios hold. ROE is okay-ish.
10. P&L Breakdown – Show Me the Money
| FY25 Snapshot | ₹ Cr |
|---|---|
| Revenue | 3,345 |
| EBITDA | 472 |
| Other Income | 350 |
| PBT | 749 |
| PAT | 550 |
| EPS | 14.99 |
Caution: ₹350 Cr is other income. That’s 63% of PBT.
11. Peer Comparison
| Company | P/E | ROCE (%) | OPM (%) | EPS |
|---|---|---|---|---|
| Hindustan Aeronautics | 39 | 33.9 | 31.0 | 26.07 |
| Bharat Electronics | 56 | 39.0 | 28.8 | 29.3 |
| BDL | 122 | 20.0 | 14.0 | 14.99 |
| Zen Tech | 58 | 36.7 | 38.3 | 26.08 |
Observation: BDL has the worst OPM and highest PE. Quite the combo.
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: 74.93% (Govt. of India)
- FII Holding: 3.25%
- DII Holding: 9.45%
- Retail Holding: 12.35%
- Dividend Payout: 58% in FY25
- Retail Shareholders: 5.67 lakh
13. EduInvesting Verdict™
Bharat Dynamics is a textbook PSU paradox:
- Near-zero debt, high asset base, monopoly-like business
- Yet PE is absurd, sales are sluggish, and other income drives half the earnings
If India enters an arms race, BDL becomes a multi-bagger.
If not? You paid 122 PE for a dividend yield of 0.29%.
BDL = Bharat Dividend Less?
Metadata
– Written by EduInvesting | July 15, 2025
– Tags: Bharat Dynamics, Defence Stocks, PSU Watch, Valuation Bubble, Missile Monopoly, EduInvesting Premium
