Multibagger Stock: Bharat Dynamics share price zooms over 220% in 6 months, gains 970% in 5 years

Robust order wins, increased budget allocation, the government's emphasis on reducing defence imports and promoting domestic procurement, improvement in defence exports, and improved financials have significantly bolstered investor interest in defence stocks, propelling them to hit record highs.

As a result, defence stocks have emerged as standout performers in recent years, multiplying their investors' wealth in a remarkably short span. Notably, among the defence PSUs, Bharat Dynamics has stood out, experiencing a remarkable surge over the last seven months, leading to a spectacular rally in its shares.

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Further fueling this upward momentum, defence stocks, including Bharat Dynamics, continued their winning streak in today's trading session following exit polls indicating a decisive victory for the BJP-led NDA.

Investors remain optimistic that the government will maintain its focus on strengthening the nation's defence sector and fostering greater self-reliance. With an emphasis on indigenous defence production, increased budget allocations, and policies aimed at reducing dependency on imports, the sector is poised for robust growth. 

In today's trading session, Bharat Dynamics reached an all-time high of ₹1,662 per share, marking a 6.7% increase in intraday trade. Over the past six months, the stock has undergone a remarkable rally, surging from ₹487 per share to its current trading price of ₹1,596, delivering a remarkable return of 227%. Zooming out, the stock has gained a staggering 970% in the last five years.

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Bharat Dynamics split the face value of its shares from ₹10 to ₹5 and has been trading on an ex-split basis since May 24, 2024.

Meanwhile, the government of India's initiatives aimed at bolstering self-reliance in providing advanced weapon systems to the Indian Armed Forces, along with clearance for export to Friendly Foreign Countries (FFCs), have created growth opportunities for BDL. 

The government's objective to elevate India's defence exports to US$5 billion by 2024–25 underscores the growing significance and potential of the sector. As a result, the company has clinched substantial order wins, bolstering its strong performance in the market.

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As of January 31, its export order book totaled ₹2,580 crore, contributing to a total order book of ₹20,070 crore, as per the company's recent exchange filing. 

In the recent quarter ending March (Q4FY24), the company witnessed a remarkable 89% year-on-year (YoY) surge in net profit, reaching ₹288.8 crore compared to ₹152.8 crore in the previous year. 

Revenue from operations also surged by 7% to ₹854.1 crore, up from ₹798.3 crore in the corresponding period last year. 

Additionally, its EBITDA soared by 72.6% to ₹316.5 crore in the fourth quarter of the fiscal year, compared to ₹183 crore in the same period of the previous fiscal year.

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Going forward, the outlook for the company appears promising, driven by the Indian government's ongoing efforts to achieve self-reliance in defence manufacturing under the 'Aatmanirbhar Bharat Abhiyan'. 

The government has released a positive indigenisation list, which includes various sub-systems, assemblies, sub-assemblies, and components in recent years, with plans for further expansion in the coming years. This initiative is set to create significant growth opportunities for the company.

Disclaimer: We advise investors to check with certified experts before making any investment decisions.