Bharat Dynamics : First Missile Mnaufacturer to Go for IPO | CORPORATE ETHOS

Bharat Dynamics : First Missile Mnaufacturer to Go for IPO

By: | March 12, 2018
bharat dynamics
Mar 12: Bharat Dynamics Ltd, a public sector company based in Hyderabad under Ministry of Defence is a manufacturer of guided missiles and allied defense equipment. It is a Miniratna Category-I and among the few industries in the world with the capability to produce state of the art guided weapon systems.
In September it had signed a contract with Research Centre Imarat (RCI) for supply of Medium Range Surface-to-Air Missiles to Indian Army. The contract was signed for production, deliveries and product support of MRSAM system for the Indian Army.
The company was set up in 1970 to be a manufacturing base for guided missiles and allied defence equipment. It has three manufacturing units- the first one is co-located with its corporate office in Hyderabad, the second on in Medak and third in Vishakapatnam. The company is planning to set up two more units- one at Amravati District and another at Ibrahimpatnam in Telengana state. At Amravati, the company plans to produce Short Range Air Defence Missile and the facility is spread over 530 acres.
The total guided missile and torpedo market of India is around $24.49 billion and expected to grow 4.75 per cent a year until 2026, according to Frost and Sullivan. About 80 per cent of the market valuation remains unaddressed and $19.41 billion worth of opportunities will emerge in 2017-26.
The company is 98% dependent on Indian Army for its business.
Financial Record
The company reported 30% growth in revenues in FY17  at Rs 4,832 cr while net profit rose 5% to Rsw 490 cr.
At an offering at the highest price band of 428, the comapny is valued 16 times its FY17 earnings and 22 times its annualised first half earnings of FY18. Other defence companies such as Bharat Electroncis, Apollo Micro System are trading at 13 and 40 times their annualised earnings. The return on equity fo 26.8% , 30.4% and 22.2% in the past three years looks attractive.