Miniratna PSU, Bharat Dynamics share price rallied on Wednesday, nearing its 52-week high after it turned ex-dividend for its interim dividend payout of Rs 8.85 per share. This reward is going to be paid by mid-April before the stock splits in the ratio of 1:5. Yes, you've read it right, BDL has stored in double treat for its investors. There is a further 16% potential upside in BDL shares ahead, as the highest target price is set by ICICI Direct to the tune of Rs 2,010.
Bharat Dynamics Share Price:
BDL shares are currently traded at Rs 1,774.65 apiece up by 2% on BSE with a market cap of Rs 32,526.01 crore. The stock touched an intraday high of Rs 1,812.30 apiece which is near to its 52-week high of Rs 1,984.40 apiece.
On April 3rd, BDL shares gave more than double the returns with a rise of 101% from its 52-week low of Rs 901 apiece.
On the ex-dividend date which was on April 2nd, BDL shares ended at Rs 1,739.60 apiece, down by 1.9% on BSE with a market cap of Rs 31,883.61 crore.
From its ex-dividend date price level, BDL shares have the potential of 16% upside ahead, while from the current price level, the surge is likely over 13%.
Bharat Dynamics Dividend:
BDL turned ex-dividend on April 2nd for an interim dividend of Rs 8.85 per share having a face value of Rs 10 each fully paid-up for the financial year 2023-24. The payment of Interim Dividend will be completed on and before 18 April 2024.
Also, this is the first interim dividend for FY24. In the financial year 2022-23, the company paid up to 93.50% dividend amounting to Rs 9.35 per share.
Bharat Dynamics Stock Split:
The defence player has announced its first-ever stock split to the tune of 1:2 ratio, meaning 1 existing share will split into two new shares.
The face value will be cut from Rs 10 to Rs 5 per share. The reason behind the stock split is to comply with DIPAM Guidelines on Capital Restructuring; (ii) To encourage wider participation of small investors; and (iii) To enhance liquidity of the Equity Shares of the Company in the Stock Market.
BDL expects to complete the stock split in about 2-3 months from the date of shareholders' approval. It said, "The record date for the above sub-division/ split of Equity Shares shall be decided after obtaining approval for sub-division/ split from the shareholders through postal ballot electronic voting process and will be intimated in due course."
Bharat Dynamics Share Price Target:
In its research note, ICICI Direct highlighted that the company's operational performance in Q3FY24 has improved considerably on a YoY basis (led by a pick-up in execution) after seeing muted execution during Q3FY23-Q1FY24 on account of delays in receipt of some key components. Revenue was up ~30% YoY with EBITDA margin marginally improved to ~20%, translated into EBITDA increase by ~34% YoY. Revenue for 9MFY24 stands at ₹ 1515.2 crore (down 10% YoY) with an EBITDA margin of 14.5% (vs 13.3% in 9MFY23).
ICICI Direct believes that BDL is strongly placed to benefit from increasing capital outlay for indigenised defence platforms like missiles, torpedoes & Countermeasure dispensing systems. We estimate revenue, EBITDA and PAT to grow at 29.4%, 41.4% and 46.9% CAGR respectively over FY23-26E. On its valuation, the brokerage added, "Valuation at 27.3x P/E on FY26E basis looks attractive given strong growth ahead led by multiple sectoral tailwinds. We recommend BUY on BDL with a target price of ₹ 2010 per share."
Bharat Dynamics (BDL), one of the leading defence PSUs in India, is engaged in the manufacture of surface-to-air missiles (SAMs), anti-tank guided missiles (ATGMs), air-to-air missiles (AAMs), underwater weapons, launchers, countermeasures and test equipment.
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.
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