Bharat Dynamics shares fell over 8% on Friday, May 29, following the disappointing Q4 and FY26 earnings announcement. The defence PSU stock lost as much as 8.4% to its day's low of ₹1,175.05 on BSE, reflecting investor concerns over the weak performance. According to latest market data, the stock has been under pressure in recent weeks, declining 1.57% over the past week and 5.65% in the last two weeks. On a monthly basis, the stock is down 1.43%, while it has fallen 13.33% on a year-to-date basis. Despite the recent decline, the company's stock has delivered more than 621% returns over the last five years and over 145% gains in the last three years, though it has lost 32.8% in the last one year and 13% so far in 2026.
According to latest NSE filing reports, Bharat Dynamics recorded a 59.5% fall in consolidated net profits to ₹113 crore in the March quarter of financial year 2025-26, compared to ₹273 crore in the same period of the previous fiscal year. The aerospace and defence company's revenue from core operations contracted 73% year-on-year to ₹480 crore in the fourth quarter, compared with ₹1,777 crore in the same period a year ago. The company's earnings per share (EPS) also dropped to ₹3.09 apiece, from ₹7.44 per share in the same quarter of the previous fiscal year. Both net profit and revenue fell short of analysts' expectations, with the company estimated to register a consolidated net profit of ₹320 crore and revenue of ₹1,845 crore for the March quarter. For the full financial year FY26, Bharat Dynamics reported a standalone net profit of ₹420 crore, down 23% from ₹550 crore recorded in FY25, with full-year revenue contracting 27% to ₹2,442 crore.
According to Motilal Oswal research, Bharat Dynamics' Q4FY26 performance came in below expectations as execution was impacted by delays in the supply of radars, seekers and other critical components required for the Akash and Astra Mk1 missile systems. These components are sourced from external vendors, resulting in project execution delays. The brokerage highlighted that profitability was adversely affected by a sharp increase in employee expenses and other operating costs. Despite near-term challenges, Motilal Oswal noted that Bharat Dynamics is likely to recognise revenue of ₹2,000 crore to ₹2,500 crore during the first half of FY27 as component supplies begin to improve, with the company potentially resorting to importing certain components to prevent further delays in deliveries.
Despite the challenging quarterly performance, Bharat Dynamics declared a dividend of ₹0.40 per equity share -- an 8% payout given the face value of ₹5. The dividend, subject to shareholders' approval at the upcoming AGM, will be paid within 30 days from the day of the AGM. This marks the final dividend for FY26. The company has maintained a regular dividend payment history, with previous interim dividends of ₹4.50 announced in February 2026 and final dividends of ₹0.65 in May 2025. For the full year ended March 31, the missile maker registered a standalone net profit of ₹420 crore, marking a 23% year-on-year decline from ₹550 crore in FY25, with full-year revenue contracting 27% to ₹2,442 crore.
Following the weak results, Motilal Oswal downgraded Bharat Dynamics to 'Neutral' and reduced its target price to ₹1,150 from ₹1,500 earlier. The brokerage pointed out that the stock is currently trading at 70.5x FY27 earnings, 48.1x FY28 earnings and 38.1x FY29 earnings. Given the elevated valuations and uncertainty around execution timelines, Motilal Oswal believes investors should wait for sustained improvement in project execution and better visibility on component supplies before turning more constructive on the stock. The brokerage has reduced its earnings estimates for Bharat Dynamics by 25% for FY27 and 28% for FY28, citing expectations that execution will remain slower than previously estimated and margins could stay under pressure due to a higher proportion of bought-out components in the company's projects.
