BDL shares slumped 8.44% to hit a low of ₹1,175.05 in Friday's early trade following the company's weak fourth-quarter results. According to reports from Moneycontrol, the sharp decline reflects investor concerns about the company's operational challenges and future execution timelines. The stock was trading at 70.5x/48.1x/38.1x on FY27/FY28/FY29 EPS at the current market price.
As reported by Motilal Oswal Financial Services Ltd, BDL reported revenue declined 73% YoY to ₹480 crore in Q4 FY26, with EBITDA margin contracting to 11.5% versus the estimate of 23.8%. The brokerage noted that absolute EBITDA declined 82% YoY to ₹55.2 crore, while PAT declined 59% YoY to ₹110 crore, which was 66% below estimates. For the full year FY26, revenue/EBITDA/PAT declined 27%/53%/24% YoY to ₹2,440 crore/₹220 crore/₹420 crore, with EBITDA margin contracting 500bp YoY to 9.1%. The weak performance was attributed to supply-chain disruptions linked to the West Asia conflict and adverse product mix.
According to Motilal Oswal, the company's long-term growth drivers remained intact, supported by a strong order pipeline across missile programmes including MRSAM, QRSAM, Astra, Akash, Akash-NG, VL-SRSAM, Nag, HELINA and MPATGM. However, the brokerage downgraded the stock to 'Neutral' from 'Buy' and reduced the target price to ₹1,150 from ₹1,500, based on 42x Jun'28E EPS. The revised target price reflects concerns about continued execution slippages and weak margin recovery. Meanwhile, Nuvama Institutional Equities downgraded to 'REDUCE' and cut the target price to ₹1,150 from ₹1,900, citing 48%/40% cuts in FY27E/28E EPS estimates due to continued execution challenges.
As reported by Motilal Oswal, the company's quarterly results were weaker than estimates, with execution impacted by delays in the supply of radars, seekers and other components for Akash and Astra Mk1 missiles from external vendors. The brokerage said BDL was likely to book revenue of around ₹2,000-2,500 crore in the first half of FY27 from these orders once component supplies resumed. The company's order book remained healthy at around ₹26,000 crore, but overall execution was likely to remain slower than earlier estimates, with margins expected to remain under pressure due to a higher share of bought-out components. Nuvama noted that the weak performance was driven by supply-chain disruptions linked to the West Asia conflict and adverse product mix, keeping near-term earnings recovery elusive despite a strong backlog.
