Bharat Dynamics ltd.(NSE: BDL) Ltd. : Q3 FY23 Results Out; Total Income fell 40% YoY

Bharat Dynamics Limited (NSE:BDL) is a government-owned defense company in India that specializes in manufacturing guided missiles and other defense equipment. The company was established in 1970 and is headquartered in Hyderabad, India. BDL’s product portfolio includes various types of missiles, including surface-to-air missiles, anti-tank guided missiles, and underwater weapons. The company also manufactures defense equipment such as torpedoes, countermeasures, and test equipment. BDL supplies its products to the Indian armed forces, as well as to other countries. The company has been awarded various certifications and recognitions, including the ISO 9001 certification for quality management and the Raksha Mantri’s Award for Excellence in Performance.

Bharat Dynamics Limited (BDL) has reported its Q3FY23 results, which show a decline in revenue of 42.6% YoY to INR 461.6 crore, significantly lower than the estimated revenue of INR 862.6 crore. The de-growth in revenue both YoY and QoQ shows muted execution during the quarter in its existing contracts. However, 9MFY23 revenue was up 17.8% YoY due to significantly higher revenue during Q1FY23 (+440.3% YoY) on a lower base.

Gross margins improved 619 bps YoY and 1436 bps QoQ to 69.8% as raw material costs declined considerably both YoY and QoQ. However, EBITDA margins came in at 19.3% (vs. estimated 27%), down 1674 bps YoY due to significantly higher other costs (25.1% of sales in Q3FY23 vs. 8.6% of sales in Q3FY22). Sequentially, EBITDA margin improved by 171 bps. 9MFY23 EBITDA margin was also down 911 bps YoY at 13.3%.

EBITDA declined 69.3% YoY (-5.3% QoQ) to INR 88.9 crore (vs. estimated INR 232.9 crore). The 9MFY23 EBITDA was down significantly by 30.1% YoY to INR 224.8 crore. PAT was at INR 83.7 crore, down 61.1% YoY led by a decline in revenues and contraction in margins. 9MFY23 PAT was down 15.5% YoY to INR 199.4 crore.

BDL’s order backlog was at INR 11,906 crore as of November 2022 end, which is 3.8x TTM revenues. The company’s revenue and profitability have been impacted due to muted execution during the quarter in its existing contracts, along with significantly higher other costs. However, the order backlog provides visibility on the company’s future revenue growth.