Bharat Dynamics Surges 8% After Securing ₹2,960 Crore Defence Ministry Order

resr 5paisa Research Team

Last Updated: 16th January 2025 - 05:40 pm

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In an exchange filing, Bharat Dynamics announced that it had signed a ₹2,960 crore contract with the Ministry of Defence for the supply of Medium-Range Surface-to-Air Missiles (MRSAM) to the Indian Navy. The agreement was finalized in New Delhi in the presence of Defence Secretary Rajesh Kumar Singh, as per an official press release from the ministry.

The share price of Bharat Dynamics Ltd (BDL) surged by over 8% on January 16, reaching an intraday peak of ₹1,227.9. Despite the initial rally, the stock later pared some gains and was trading at ₹1,194.70, marking a 5.39% increase, around 1:56 PM.

The contract falls under the ‘Buy (Indian)’ category, emphasizing the Aatmanirbhar Bharat (Self-Reliant India) initiative. The missiles will be manufactured with a high degree of indigenous content, further strengthening India's domestic defence industry. The project is also expected to generate approximately 3.5 lakh mandays of employment across various sectors, including Micro, Small, and Medium Enterprises (MSMEs).

The ministry described the deal as a significant milestone in India's ongoing efforts to modernize its defence capabilities and enhance self-reliance in military technology.

In another key development, Bharat Dynamics announced in a separate exchange filing on January 16 that the Defence Ministry has approved the appointment of DV Srinivas as Director (Technical) on the company’s board. Notably, Srinivas had already assumed the position on September 20, 2024.

BDL’s stock has shown strong growth over the past year, currently trading nearly 54% higher than its 52-week low of ₹776.08, recorded on March 14, 2024. However, the stock remains down by over 33% from its 52-week high of ₹1,794.7, recorded on July 5, 2024, on the Bombay Stock Exchange (BSE).

In the last 12 months, the company's shares have appreciated by approximately 37%, reflecting investor confidence in Bharat Dynamics’ expanding order book and its role in India's defence modernization efforts.

With the Indian government increasing its focus on defence indigenization, Bharat Dynamics is poised for further growth. The company, which specializes in missile production and other strategic defence equipment, is expected to benefit from a rising number of domestic and export orders.

Furthermore, the global geopolitical landscape and India's commitment to strengthening its defence capabilities are likely to drive additional contracts for Bharat Dynamics in the coming years. The company’s ability to manufacture state-of-the-art missile systems with indigenous technology gives it a competitive edge in both domestic and international markets.

Analysts believe that Bharat Dynamics' strong fundamentals, growing order pipeline, and focus on self-reliance in defence manufacturing could help sustain its positive stock momentum. However, investors are advised to monitor market trends and upcoming defence contracts, which could influence the stock’s future trajectory.

With the latest ₹2,960 crore contract, Bharat Dynamics has further solidified its position as a key player in India’s defence sector, paving the way for long-term growth and sustainability.

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