Incorporated in 1970, Bharat Dynamics Limited (BDL), a Government of India
(GOI) Enterprise under the Ministry of Defense (MOD) was established in
Hyderabad to be a manufacturing base for guided missiles and allied defense
equipment. BDL, a Miniratna Category-I Public Sector Unit (PSU), is amongst the
few industries in the world having capabilities to produce state-of-the-art guided weapon systems.

Outlook & Valuation: In terms of valuations, the pre-issue P/E works out to 22.7x
1HFY2018 annualized earnings (at the upper end of the issue price band), which is
lower compared to BDL’s peers like Bharat Electron and Apollo Micro System
(trading at 33.6x and 40.7x of its 1HFY2018 annualized earnings respectively).
Further, BDL has a strong order book and revenue visibility, coupled with superior
return ratios compared to peers. Hence, considering the above positive factors
including growth in the defence industry, we recommend SUBSCRIBE on the issue.

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