Defence stock: Brokerages expect up to 32% upside in Bharat Dynamics shares, here's why

Shares of Bharat Dynamics Ltd are expected to rise up to 32% in a year, according to Motilal Oswal. Motilal Oswal projects that Bharat Dynamics' revenue, EBITDA, and net profit will grow at a compounded annual rate of 35%, 64%, and 51% respectively from financial year 2025 to 2028. The company has ramped up execution following the easing of supply chain issues, which has led to robust quarterly performance, though margins remain affected by the ongoing project mix. "Going forward, we expect execution growth to remain strong, driven by a healthy order book and also expect margins to improve as the operating leverage kicks in," Motilal Oswal wrote.

On Thursday, shares of Bharat Dynamics closed at ₹1,516, marking a 1.1% decline for the session. Despite the dip, the stock has delivered a 34% return so far in 2025. Brokerages have maintained a positive outlook, with Motilal Oswal reiterating its "buy" recommendation and raising its price target to ₹2,000 from ₹1,900, indicating a possible 32% upside from current levels. Choice Broking also maintained its "buy" rating, valuing the stock at 35 times the estimated earnings per share for financial year 2027-2028 and setting a target of ₹1,965. 

The company announced an order win on Thursday valued at ₹2,000 crore for Invar anti-tank missiles, with several brokerages forecasting strong growth for the company as a result of this emergency procurement.

Industry experts note that Bharat Dynamics has capitalised on improved execution as supply chain constraints have lessened, though profitability has been impacted by the current mix of projects underway. The company's healthy order book and recent procurement activity are expected to support ongoing operational strength. Market participants will watch for continued progress in project execution and margin improvements as Bharat Dynamics seeks to meet elevated expectations. The company's position in the defence sector remains underpinned by analyst optimism and a strong government focus on domestic defence manufacturing.