Bharat Dynamics Share Price Jumps On Rs 2,960-Crore Deal With Defence Ministry

Bharat Dynamics Ltd.'s share price jumped over 8% after it signed a Rs 2,960-crore contract with Ministry of Defence for medium-range surface-to-air missiles for Indian Navy on Thursday.

The contracts were signed on Thursday in the presence of Defence Secretary Rajesh Kumar Singh, according to a statement by the Ministry of Defence.

The medium-range surface-to-air missiles system is a standard feature onboard several Indian Naval ships and is set to be integrated into most of the future platforms planned for acquisition. "The contract marks a critical milestone in the ongoing efforts to bolster India’s defence capabilities and indigenise advanced military technology," the Ministry of Defence said in a statement.

Aligned with the 'Aatmanirbhar Bharat' initiative, the missiles will be provided by Bharat Dynamics under the 'Buy (Indian)' category, with a substantial portion of the content being indigenous. The contract is expected to create approximately 3.5 lakh man-days of employment within the defence sector, including various MSMEs.

The company's order book as of September 2024 stood at Rs 18,852 crore. In addition, the company has an order pipeline of Rs 20,000 crore that it expects to receive in the next two-three years.

The company's export order as of Sept. 30 stood at Rs 2,445 crore, the company said in its investor presentation.

Shares of Bharat Dynamics rose as much as 8.38% to Rs 1,229 apiece, the highest level since Dec. 24. They pared gains to trade 5.38% higher at Rs 1,195 apiece, as of 12:45 p.m. This compares to a 0.45% advance in the NSE Nifty 50.

The stock has risen 36.85% in the last 12 months. Total traded volume so far in the day stood at 1.6 times its 30-day average. The relative strength index was at 54.

Out of nine analysts tracking the company, six maintain a 'buy' rating, two recommend a 'hold' and one suggests 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 8.7%.