Bharat Dynamics Ltd - SUBSCRIBE - IPO Report - HEM SECURITIES

Bharat Dynamics Ltd (Company) is a 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. Co is one of the leading defence PSUs in India engaged in the manufacture of Surface to Air missiles (SAMs), AntiTank Guided Missiles (ATGMs), underwater weapons, launchers, countermeasures and test equipment. Co is the sole manufacturer in India for SAMs, torpedoes, ATGMs (Source: F&S Report).

Strong order book & financial performance: As of January 31, 2018, co's current order book was Rs. 105,430.00 million . Co have delivered consistent growth over the last five financial years both in terms of financial and operational metrics. Its revenue from operations and profit for the year has increased from Rs. 28,408.21 million and Rs. 4,435.48 million respectively, in Fiscal 2015 to Rs. 48,327.56 million and Rs. 4,903.19 million, respectively, in Fiscal 2017 at a CAGR of 30.43% and 5.14% respectively.

Increase in indigenisation of co's products and implementation of the "Make in India" policy :Co have tie-ups with various domestic and international Original Equipment Manufacturers (OEMs) for the development of its existing and future products. Co have achieved indigenisation of upto 75 – 90% of the KonkursM ATGM and Milan 2T ATGM

Valuation: The co is bringing the issue at p/e multiple of 24-25 on annualized H1FY18 eps at price band of Rs 413-428/share. Co with its modern facilities and infrastructure to deliver quality products in a timely manner has strong order book and established financial track record of delivering growth with experienced board and senior management team. Looking after strong future prospects of co with decent fundamentals, we recommend "Subscribe" on issue.

Source : Equity Bulls

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