Mehabe score: 5 G Factor: 5 Piotski Score: 5 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 5.
Description
Bharat Dynamics (BDL), is a Government of India Enterprise. It is engaged in the manufacturing of guided missiles and allied defence equipments # #.
Main Points
Orderbook of around 8100 Crores (Jan’21) #
Recent orders:
– Konkurs-M ATGM worth Rs. 633 Cr #.
– Contract worth ₹ 1188 Cr for the supply of heavyweight torpedoes (Varunastra) to the Indian Navy. The delivery period is 42 months. #
– Export contract for the supply of one Shipset of Light Weight Torpedo (LWT-XP). The total value of the contract is $ 6.24 Mn and to be executed in 2020-21.
– Export contract for LWT-XP on 12 Jul 2019 for the supply of two Shipset of Light Weight Torpedo (LWT-XP) & Associated Equipment. The total value of the contract is $ 14.33 Mn which is to be executed in 2020-21.Site:BDLMain Symbol:BDL
Stock trades at 395.0, above its 50dma 382.18. It also trades above its 200dma 356.89. The stock remains bullish on techicals
The 52 week high is at 429.20 and the 52week low is at 280.40
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has been maintaining a healthy dividend payout of 37.48%
Weakness
– The company has delivered a poor sales growth of -14.04% over past five years.
Competition
– The industry trades at a mean P/E of 21.2x. GMM Pfaudler trades at the industry’s max P/E of 112.55x. BDL trades at a P/E of 23.0x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 8.0. BDL has a G-Factor of 5 and Piotski scoreof 5.
– Average 1 month return for industry is 7.6%. The max 1- month return was given by HLE Glascoat: a return of 44.79 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 129.0 cr compared to Rs 31.0 cr for period ended Jun 2020, a rise of 316.1%
Company reported negative operating profit of Rs -34.0 cr for period ended Jun 2021. For same period last year, operating profit was -112.0
The EPS for Jun 2021 was Rs -1.14 compared to Rs 14.21 for previous quarter ended Mar 2021 and Rs -4.26 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2001.0 cr for period ended TTM vis-vis sales of Rs 1914.0 cr for the period ended Mar 2021, a growth of 4.3%. The 3 year sales cagr stood at -13.3%.
Operating margins expanded to 21.0% for period ended TTM vis-vis 18.0% for period ended Mar 2021, expansion of 300.0 bps.
Net Profit reported at Rs 315.0 cr for period ended TTM vis-vis sales of Rs 258.0 cr for the period ended Mar 2021, rising 18.1%.
Company reported a poor Net Profit CAGR of -9.4% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 1068.0 cr for period ended Mar 2021 vis-vis Rs 504.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 10.0% compared to 17.0% over the last 3 Years. – The stock has given a return of -1% on a 1 Year basis vis-vis a return of 3% over the last 3 Years. – The compounded sales growth on a TTM bassis is -24% vis-vis a compounded sales growth of -25% over the last 3 Years. – The compounded profit growth on a TTM basis is -20% vis-vis a compounded profit growth of -21% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.41% vis-vis 0.28% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 6.75% vis-vis 7.27% for Mar 2021
Conclusion
– has reduced debt.
– is almost debt free.
– has been maintaining a healthy dividend payout of 37.48% – The company has delivered a poor sales growth of -14.04% over past five years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 382.18 and is trading at 395.0, thus bullish price action wise.
