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BDL is inline with capability building to carter future growth. We expect order execution to pick up from FY25 onwards led by various order execution such as in the near term, the company expects execution of program such as Astra Mk-1, SAAW, ULPGM, Drone fired Bombs, SPIKE-ER, 70MM LGR orders by FY25 and QRSAM, NAG ATGM, Advanced Torpedo, MIGM, GRAD Rockets by FY26. Post that the company expects Akash-NG, VLRSAM, MPATGM, Heavy weight Torpedo, AMOGHA-III ATGM, MISTRAL, ASRAAM orders by FY27, supported by association with DRDO and in House R&D and Foreign Collaboration

We have a positive outlook on BDL, as it is catering the strategic needs of the MoD Indian defence forces, supported by 1. Sole supplier of offensive, as well as defensive systems domestically, 2. Upcoming big ticket project are in the pipeline and it is expected to materialize from FY25 onwards, 3. Increasing exports opportunity, talks are under way with 4-5 friendly countries, 4. Diversified product portfolio across armed forces, 5. The company's humongous order book, which stood at ~Rs 195 bn as on 1 st April 2024 (~8.2x of FY24 revenue will support the growth story of the company. We like to ascribe “REDUCE” rating due to expensive valuation on the stock with a target price of Rs.1501 (60x of FY26E EPS).

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