Shares of Bharat Dynamics Ltd (BDL) have been under significant pressure recently, extending their decline for the second consecutive session. On Tuesday, the stock closed at ₹1,337.90, marking a drop of 0.42% from the previous session. This latest decline has pushed BDL shares down by 25.45% from their all-time high of ₹1,794.70, which was achieved on July 5, 2024.
Recent Financial Performance
BDL’s recent financial performance has contributed to the stock’s downturn. For the June 2024 quarter (Q1 FY25), the defence PSU reported a dramatic 82.8% drop in net profit, which stood at ₹7.21 crore compared to ₹41.81 crore in the same quarter last year. Additionally, revenue from operations fell by 35.8% to ₹191.16 crore from ₹297.72 crore in the corresponding period of the previous year.
The significant decline in profit and revenue has raised concerns among investors, leading to increased volatility in the stock price. The company’s disappointing quarterly results have contributed to the current sell-off.
Expert Opinions on the Stock
Despite the recent correction, some experts believe there are still opportunities for investors. Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, suggests that while the quarterly results were underwhelming, the long-term outlook for BDL remains positive. He notes the ongoing momentum in the defence sector and the company’s growth potential. Bathini advises that investors with a long-term perspective might consider holding onto the stock, while new investors could look to buy on dips.
Osho Krishan, Senior Research Analyst – Technical & Derivatives at Angel One, highlights that the stock has seen a significant correction from its peak. He identifies a major support zone at ₹1,200, which is expected to prevent further declines. However, a breakdown below this level could alter the technical outlook. On the upside, Krishan points out that an intermediate resistance exists in the ₹1,440-₹1,450 range. A decisive move above this resistance could renew buying interest in the stock.
Jigar S Patel, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers, provides additional technical insights. Patel suggests that immediate support for the stock is at ₹1,300, with resistance at ₹1,350. He notes that a decisive close above ₹1,350 could potentially lead to a further rise towards ₹1,400. For short-term traders, Patel expects the trading range to be between ₹1,300 and ₹1,400.
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Recommendations for Investors
Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, offers a practical trading strategy for investors considering BDL. Singh recommends buying the stock around the ₹1,320 level, with a target price of ₹1,450. He also advises placing a stop loss at ₹1,290 to manage risk.
Overview of Bharat Dynamics
Bharat Dynamics Ltd is a public sector undertaking (PSU) under the Ministry of Defence. As of June 2024, the government holds a 74.93% stake in the company. Despite the current downturn, BDL remains a key player in the defence sector, which is expected to continue growing.
The recent financial results and subsequent stock price decline have created a challenging environment for investors. However, with potential support levels and technical resistance points identified, there are still opportunities for those looking to enter the stock at current levels.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered as investment advice. Investors are encouraged to consult with their financial advisors before making any investment decisions.
