What to expect? : Stability & longer term growth. Marginal listing gains can be expected.
Valuation (P/E) : 16x FY17 Earnings.
Bharat Dynamics Limited (“BDL”) is one of the leading defence PSUs in India engaged in the manufacture of Surface to Air missiles (SAMs), Anti-Tank Guided Missiles (ATGMs), underwater weapons, launchers, countermeasures and test equipment. BDL is the sole manufacturer in India for SAMs, torpedoes, ATGMs (Source: F&S Report). They are also the sole supplier of SAMs and ATGMs to the Indian armed forces (Source: F&S Report). Additionally, they are also engaged in the business of refurbishment and life extension of missiles manufactured. BDL is also the co-development partner with the DRDO for the next generation of ATGMs and SAMs.
BDL is the wholly-owned GoI company headquartered in Hyderabad and under the administrative control of the MoD, GoI and were conferred the 'Mini-ratna (Category -1)' status by the Department of Public Enterprises, GoI. Founded in 1970, BDL has over 4 decades of experience in manufacturing missiles and countermeasures and its allied equipments.
The company operates in an environment characterized by both increasing complexity in factors influencing national security and continuing economic challenges in India and globally. A significant component of their business outlook in this environment is to focus on execution, improving standards and quality and predictability of the delivery of their products to the Indian Army. They are also continued to invest in technologies to fulfil the requirements of the Indian armed forces and also invest in their people so that they have the necessary technical skills to succeed without limiting their ability.
BDL has been awarded various prestigious awards such as RakshaMantri’s institutional award for “Excellence” in performance for the year 2014 – 15 and the group / individual award in the “Innovation Category” for the year 2014 -15, in recognition of its consistent growth and adaptation and the PSE Excellence Award – 2015 by the Indian Chamber of Commerce in the Miniratna category for operational performance excellence. Company’s current order book as of October 31, 2017 is Rs.11,164crore.
The Revenue from Operations and Profit for the year has increased from Rs.2,840.82crore and Rs.Rs.443.55 crore respectively, in Fiscal 2015 to Rs.4,832.76 crore and Rs.490.32 crore, respectively, in Fiscal 2017 at a CAGR of 30.43% and 5.14% respectively. BDL has consistently declared dividends for the last 5 Fiscals.
Objects Of the Issue
1) To carry out the disinvestment of 2,24,51,953 equity shares by the selling shareholder constituting 12.25% of the company’s pre-offer equity share capital of the company.
2) To achieve the benefit of listing the equity shares on the stock exchanges.
No. of shares post issue :18,32,81,250 shares
Net earnings FY17: Rs. 490.31Cr
EPS (post issue): 26.75
*Note :Valuation is done at the upper price band ie, at Rs.428