BDL shares plunge 8% after weak Q4 results; analysts cut earnings forecasts

Bharat Dynamics shares crashed on the BSE after Q4FY26 results showed a sharp revenue decline, prompting brokerages to cut FY27 and FY28 earnings estimates

Bharat Dynamics share price today

A sharp miss on revenue and profitability in the March quarter (Q4) of 2025-26 financial year (FY26) has cast a shadow over the near-term growth outlook for state-run defence manufacturer Bharat Dynamics, prompting brokerages to cut their FY27 and FY28 earnings estimates amid delays in key missile programmes and lingering supply-chain bottlenecks. 

Consequently, Bharat Dynamics share price tumbled 8.4 per cent to ₹1,175 per share on the BSE, weighed by huge volumes.

The stock was lower by 7.28 per cent at 9:50 AM as against a 0.11 per cent rise in the benchmark BSE Sensex index. Around 2,27,000 shares have already changed hands on the counter on the stock exchange, higher than its two-week average volume of 96,000 shares.  READ STOCK MARKET UPDATES TODAY LIVE

 

Bharat Dynamics Q4FY26 results

BDL’s revenue from operations plunged 72.9 per cent year-on-year (Y-o-Y) and 10.9 per cent sequentially to ₹488.6 crore in Q4FY26, sharply missing Street expectations of ₹2,033.6 crore. 

Earnings before interest, tax, depreciation and amortisation (Ebitda) plummeted 81.5 per cent Y-o-Y to ₹55.3 crore, although it improved 112.8 per cent quarter-on-quarter (Q-o-Q). Ebitda margin, too, contracted 529 basis points Y-o-Y to 11.3 per cent, significantly below analysts’ expectations of 22.9 per cent.

  Profit after tax (PAT), meanwhile, fell 58.5 per cent Y-o-Y to ₹113.2 crore, but rose 55.3 per cent sequentially. PAT margin, however, expanded 802 basis points Y-o-Y to 23.2 per cent.

  For the full year FY26, revenue, Ebitda, and PAT declined 27 per cent, 53 per cent, and 24 per cent Y-o-Y, respectively.

Brokerages attributed the weak performance primarily to delays in execution and supply-chain bottlenecks rather than any deterioration in demand.

  "We believe BDL reported a weak set of numbers in Q4FY26, with a sharp decline in revenue and profitability, leading to a ~27 per cent degrowth in the top line for the full year," said analysts at Choice Institutional Equities. 

The miss, the brokerage added, appeared "largely due to execution delays rather than demand weakness", with project timelines getting pushed, affecting revenue recognition during the year. 

Those at Motilal Oswal Financial Services said BDL’s FY26 revenue performance was hit by ₹2,000 crore due to delays in deliveries of Akash and Astra Mk1 missiles.

  "The delay in the Akash missile programme stemmed mainly from delayed supplies of radars and communication systems from another vendor. While testing has been completed, final government clearance is still awaited," MOFSL explained. 

It, however, expects BDL to book nearly ₹1,300 crore of revenue from this project in the first quarter of FY27 (Q1FY27). 

Moreover, as delays in receipt of seekers from an external vendor affected execution of the Astra Mk1 programme, BDL has decided to import these components to avoid further slippages. It expects to recognise nearly ₹1,000 crore of related revenue by the second quarter of FY27 (Q2FY27).  READ | Adani Total Gas soars 41% in 6 days, zooms 90% from March low; here's why

Earnings estimates slashed sharply

Given the weak base and continued supply-side challenges, brokerages have shrply cut earnings expectations. 

Motilal Oswal, for instance, cut its FY27 and FY28 earnings estimates by 25 per cent and 28 per cent, respectively, citing slower-than-expected execution and margin pressure from a higher share of bought-out components.

  The brokerage now expects revenue and PAT to grow at a compounded annual growth rate (CAGR) of 58 per cent and 53 per cent, respectively, over FY26-28, albeit on a low base.

  It also downgraded the stock to “Neutral” from “Buy” and revised its target price to ₹1,150 from ₹1,500 earlier.

  Choice Institutional Equities, too, slashed FY27 revenue, Ebitda, and PAT estimates by 51 per cent, 54 per cent, and 49.2 per cent, respectively. It cut the respective estimates for FY28 by 32.6 per cent, 39.3 per cent, and 33.2 per cent.

  The brokerage, however, maintained its “Buy” rating with a revised target price of ₹1,500, saying the long-term opportunity remains attractive despite near-term volatility.

 

Long-term growth intact

Analysts said BDL’s long-term structural story remains intact, backed by a strong order pipeline across multiple missile programmes. 

Choice Institutional Equities said the company continues to benefit from opportunities in key programmes such as MRSAM, QRSAM, Astra, Akash, Akash-NG, VLSRSAM, Nag, HELINA, and MPATGM, along with rising export and indigenisation opportunities.

  "Execution is expected to be driven by ramp-up across MRSAM/LRSAM orders, initial production of QRSAM and continued deliveries in Astra and Akash-NG programmes," the brokerage said, adding that the weak FY26 base could support a sharp earnings recovery over FY27 and FY28 as execution normalises. 

Likewise, MOFSL added that FY27 revenue may scale up to approximately ₹4,500 crore, with margins of around 14-15 per cent, though a higher share of bought-out components could continue to weigh on profitability.

  "FY28 is expected to mark the peak execution phase for Akash, with potential revenues of ₹6,500 crore and improved margins as the share of missiles increases," it added. 

That apart, BDL's ongoing expansion plans, including a ₹500-crore investment in a naval systems manufacturing facility in Andhra Pradesh, focused on underwater weapon systems, torpedoes, and mines for the Indian Navy also bode well.

  Though analysts advised investors to track any decline or reprioritisation of the Indian defence budget, termination of existing contracts or failure to succeed in tendering projects, changes in procurement rules and regulations of the MoD and the government, and supply chain-related issues.

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