Shares of Bharat Dynamics are in focus as Elara Capital downgraded the defence stock from ‘accumulate’ to ‘sell’ rating.

Elara noted that the stock has outperformed the Nifty by 43 per cent in the last three months against the index by 8 per cent.

The downgrade follows on margins of 400-600 bps lower-than-estimated as the current price already factors in all the positives. However, Elara raised the target price from ₹1,360 to ₹1,480, signalling a 25 per cent downside from previous close.

Analysts are yet to factor in exports inflows due to uncertainty on the order finalisation timeframe.

The brokerage firm expects BDL’s EBITDA margin to be in the range of 16-18 per cent in FY26-27 as missile systems are largely indigenised. The revenue CAGR may grow over 30 per cent, Elara estimates 39 per cent, in FY25-27, aided by strong execution of ₹22,100 crore orderbook as on March 2025.

It expects an earnings CAGR of 46 per cent during FY25-28 with an average ROE of 24 per cent during FY26-28. 

Elara lowered FY26 EPS estimates by 17 per cent and FY27 EPS estimates by 8 per cent on Akash missile execution from FY26 versus lower-than-expected margin in FY25 with likely less scope for further improvement

The stock opened at ₹1,987 against the previous close of ₹1,980.35.

The stock slipped 0.72 per cent to ₹1,966.15 on the BSE as at 2.09 pm, moderating between an intraday high of ₹1,996 and a low of ₹1,948.

More Like This

Published on July 2, 2025