Elara wrote in its note that Bharat Dynamics’ margins are likely to remain in the range of 16% to 18% during financial year 2026-2027 as missile systems are largely indigenised.
The brokerage believes that Bharat Dynamics’ revenue may grow at a Compounded Annual Growth Rate (CAGR) of 30% during financial year 2025-2027, driven by strong execution of its ₹22,100 crore order book.
“The recent conflict highlighted product quality and combat mettle of Bharat Dynamics’ product portfolio and would open various export market opportunities,” Elara wrote in its note.However, the brokerage has downgraded the stock on margins being 400-600 basis points below their expectations, and that the current market price already factors in all the positives.
Elara expects the Quick Reaction Surface To Air Missile (QRSAM) tender to be floated in the fourth quarter of the current financial year. “We lower our financial year 2026 Earnings per Share (EPS) estimates by 17% and financial year 2027 EPS by 8% on Akash missile execution from this year, compared to the earlier assumption of last year and lower-than-expected margins, with less scope for further improvement.
The brokerage is expecting an earnings CAGR of 46% over the ne three years with an average Return on Equity (RoE) of 24% during financial year 2026-2028. “We are yet to factor in export inflows as there is uncertainty on the order finalisation timeframe and this will be a catalyst to monitor,” the brokerage said.
Out of the 10 analysts that have coverage on Bharat Dynamics, five of them have a “buy” rating, four say “hold”, while one has a “sell” rating.
Shares of Bharat Dynamics are trading 0.6% lower on Wednesday at ₹1,968.1. The stock has remained flat over the last one month, but is up 73% so far in 2025.
