Subscribe for long term to Bharat Dynamics IPO : ICICI Direct

Bharat Dynamics (BDL) is a defence public sector unit (DPSU) engaged in manufacturing guided missile systems. The company has a product portfolio consisting of surface to air missiles (SAMs), antitank guided missiles (ATGMs), underwater weapons, launchers, countermeasures and test equipment. BDL also undertakes life-extension and refurbishment of missile systems. Currently, it is the sole supplier of SAMs and ATGMs to the Indian armed forces. The Hyderabad headquartered company has three manufacturing facilities in Hyderabad, Bhanur and Visakhapatnam. It is a Miniratna company and is under the administrative control of the Ministry of Defence.

We recommend subscribe only for long term on the offering based on a robust order book of | 10,453 crore, strong order inflow visibility, best-inclass execution capabilities and a leverage free balance sheet. The stock is being offered at reasonable valuations (16x FY17 EPS), at the upper band of | 428/share.

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