Can this multibagger defence stock continue its rally in 2023? | Mint – Mint

  • Defence stock Bharat Dynamics has outperformed by giving multibagger return of more than 111% in 2022

Bharat Dynamics (BDL) has entered into a new missile segment of air-to-surface missile (ATS) estimated at $6 billion in India. The HELINA, the smart antiairfield weapon (SAAW) and the Rudram (next-generation, antiradiation missile; part of the third positive indigenization list) are three missiles to be produced by BDL, as per management.
“A correction in the stock price may provide a good entry for the long term as we remain optimistic on the defence indigenization story, led by the unexplored exports market in the missile space. Key risks to our call are lower spend in defence capital budget, lower allocation toward procurement in the defence capital budget, increased competition from the private sector and a significant rise in commodity prices,” said Elara Securities while maintaining its Buy rating with a target price of 1,120.
Defence stock Bharat Dynamics has outperformed by giving multibagger return of more than 111% in 2022 as compared to 2% rise in benchmark BSE Sensex during the period. 
BDL’s orderbook stood at 119 bn as on November 2022, higher 17% from March 2022. Orderbook is set to rise to 200 bn by March 2023 and 250 bn by March 2024, as per analysts.
“Bharat Dynamics (BDL), India’s premier and sole manufacturer of certain missiles, is expected to see sharp jump in order book as India lays significant thrust on its indigenous missile development program. Given that the company is DRDO’s production agency, it will maintain steady inflow of orders, and growth will be uninterrupted,” said Antique stock broking.
Exports, which is 5% currently, has the potential to grow meaningfully as the Cabinet Committee on Security has approved export of Akash missiles to nine countries. Add to that strong demand for missiles in India and a huge export market, the brokerage sees BDL posting three-year earnings CAGR of 27%. Antique has maintained its BUY rating on the stock with a target price of 1,300. 
Headquartered in Hyderabad, Bharat Dynamics Limited (BDL), was incorporated on 16 July, 1970 as a Public Sector Undertaking under the Ministry of Defence, Government of India to be the manufacturing base for guided missile systems and allied equipment for the Indian Armed Forces.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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