fell sharply on Friday after the company reported a steep decline in quarterly profit, with investors reacting to continued execution delays and weaker revenue conversion despite a strong long-term order pipeline.
The stock dropped 8.3 per cent in early trade and was trading 7 per cent lower at ₹1,189.40 at 10.20 am. It hit a low of ₹1,175.40 against the previous close of ₹1,282.20.
The company reported standalone net profit of ₹113.18 crore for the quarter ended March 2026, down 58.5 per cent y-o-y from ₹272.77 crore in the corresponding quarter last year. The board recommended a final dividend of ₹0.40 per share.
Brokerages view
Brokerages attributed the weak performance primarily to execution delays and supply chain bottlenecks rather than structural demand concerns, though the sharp earnings decline weighed on sentiment.
Choice Institutional Equities said Bharat Dynamics reported a weak set of numbers in Q4FY26, with a sharp decline in revenue and profitability leading to a nearly 27 per cent contraction in full-year revenue. The brokerage said the miss appeared largely due to project execution delays that affected revenue recognition during the year.
The brokerage noted that despite the weak FY26 performance, long-term growth drivers remained intact, supported by a strong order pipeline across missile programmes including MRSAM, QRSAM, Astra, Akash-NG, VLSRSAM, Nag, HELINA and MPATGM. It expects execution to improve over the next two years as production ramps up across key programmes, supporting revenue conversion and earnings recovery from the low FY26 base.
Choice Institutional Equities maintained its buy rating on the stock and revised its target price to ₹1,500, based on 40 times FY28 estimated earnings.
Motilal Oswal said execution is likely to remain slower than earlier expectations, while margins could stay under pressure due to a higher share of bought-out components. The brokerage cut its FY27 and FY28 earnings estimates by 25 per cent and 28 per cent, respectively, although it still expects revenue and profit after tax to grow at a CAGR of 58 per cent and 53 per cent over FY26-28 on a low base.
The brokerage downgraded the stock to neutral from buy and reduced its target price to ₹1,150 from ₹1,500, citing expensive valuations and near-term execution risks.
Meanwhile, global brokerage Goldman Sachs maintained a sell rating and cut its target price to ₹1,260, stating that execution remained a key concern. The brokerage said the company had missed expected execution targets for the seventh consecutive year.
According to Goldman Sachs channel checks, the FY26 miss was driven by domestic supply chain issues and the unavailability of a key component from an overseas supplier. As a result, Bharat Dynamics’ FY26 revenue declined 27 per cent y-o-y, unlike several other defence peers.
The brokerage also highlighted that inventory surged 75 per cent y-o-y to ₹46.3 billion, more than double FY26 revenue, mainly due to finished goods awaiting delivery. However, it noted that the company’s order book remained strong at an estimated ₹257 billion, implying one of the strongest book-to-bill ratios among defence companies under coverage. Goldman Sachs expects FY27 order inflows to remain robust at around ₹140 billion, with execution improvement remaining the key monitorable.