Bharat Dynamics Ltd (BDL) Shares Plunge 7%, Breaking 10-Day Winning Streak Amid Market Volatility

• Shares of Bharat Dynamics Ltd. (BDL) dropped by up to 7 per cent on Tuesday, ending a 10-day winning streak on the stock market.
• Investors hurried to book profits, causing the stock to open at ₹1,542 and reach a day’s low of ₹1,431.25.
• BDL stock closed at ₹1,454 on May 28, against the previous close at ₹1,544 per share on May 27.

Bharat Dynamics Ltd. (BDL) shares fall 7%, ending a 10-day winning streak; what led to the plunge?

BDL’s Recent Stock Performance

Over the past 10 days, Bharat Dynamics Ltd. (BDL) stock has soared by nearly 70 per cent. However, on Tuesday, the stock saw a significant drop of up to 7 per cent, closing at ₹1,454. This decline marks the end of a 10-day winning streak, with the stock previously closing at ₹1,544 per share on May 27.

Factors Contributing to the Decline

Investors rushed to book profits, leading to the stock’s decline. The stock opened at ₹1,542 and reached a day’s low of ₹1,431.25. The recent surge in the stock price, which saw a rise of nearly 70 per cent in the past 10 days and 150 per cent over the last six months, prompted investors to capitalize on their gains.

Company Announcements and Financial Performance

Bharat Dynamics recently announced a stock split, dividing one equity share with a face value of ₹10 into two equity shares with a face value of ₹5 each. This marks the company’s first-ever stock split. Financially, Bharat Dynamics reported revenue of ₹2,350 crore for FY24, down from ₹2,489 crore in the same period last year, based on provisional figures.

Impact of Geopolitical Issues

The company attributed the reduced turnover in fiscal 2024 to ongoing geopolitical issues in Europe and the Middle East, which have impacted its supply chain. As of April 1, 2024, Bharat Dynamics’ order book was valued at ₹19,468 crore.

Market Capitalisation and Shareholding Pattern

The recent decline led to Bharat Dynamics’ market capitalisation standing at ₹53,000 crore. As of March 31, the government held a 74.93 per cent stake in Bharat Dynamics, with 8.07% owned by retail individual shareholders, 7.93 per cent by mutual funds, 3.95 per cent by insurance companies, and 2.95 per cent by foreign portfolio investors, according to exchange data.

Company’s Core Business

Bharat Dynamics specializes in manufacturing surface-to-air missiles (SAMs), anti-tank guided missiles (ATGMs), air-to-air missiles (AAMs), underwater weapons, launchers, countermeasures, and test equipment. The shares of Bharat Dynamics were first listed on the stock market in March 2018 with an IPO price of ₹428 per share. Since then, the stock has appreciated by 260 per cent over a little more than six years.

Conclusion

The recent decline in Bharat Dynamics Ltd.’s stock price, ending a 10-day winning streak, can be attributed to profit booking by investors. Despite this, the company’s strong order book and strategic initiatives, such as the stock split, indicate a positive long-term outlook. Investors should keep an eye on geopolitical developments and their potential impact on the company’s supply chain and financial performance.