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Shares of Bharat Dynamics (BDL) hit a new high of Rs 775, on rallying 8 per cent on the BSE in Monday’s intra-day trade in an otherwise weak market on the back of heavy volume. The stock of the state-owned aerospace and defence company has zoomed 36 per cent in the past three trading days.
At 09:58 am; BDL traded 7 per cent higher at Rs 769.05, as compared to a 0.62 per cent decline in the S&P BSE Sensex. The trading volume at the counter nearly-doubled with a combined 3.65 million equity shares changing hands on the NSE and BSE.
BDL is a public-sector enterprise supervised by the Ministry of Defence. The company manufactures Surface to Air Missile (SAM), Anti-Tank Guided Missile (ATG M), Torpedoes, and Allied Defence Equipments.
Thus far in the calendar year 2022, the market price of BDL has nearly doubled or zoomed 97 per cent from Rs 392.90 at beginning of the calendar year. In comparison, the S&P BSE Sensex was down 0.17 per cent during the same period.
Government of India aims to reduce the country’s dependence on imports of defence equipment and have a more ‘self -reliant’ defence sector under the Aatmanirbhar Bharat initiative. The push for Aatmanirbhar defence will get a further boost due to current geopolitical tensions between Russia and Ukraine. Also, in the current Budget, the government has increased budget spending by 10 per cent from last year. This will help defence companies who have a strong order book, revenue visibility and clean balance sheets over the next three to four years, ICICI Securities said in defence sector report.
Meanwhile, the market price of BDL has surged 46 per cent so far in April after UAE firm Tawazun Economic Council (TEC) exchanged Memorandum of Understanding (MoU) to explore new business opportunities in various areas of mutual interest in the field of defence.
TEC is defense and security acquisition authority for the UAE armed forces. It manages procurement, technical, contractual aspects for the UAE armed forces.
Under the MoU, both BDL and TEC will work together to identify different business opportunities and assess the viability and feasibility of implementing business opportunities in the field of co-development, co-production, establishment of joint ventures, set up of maintenance, repair, refurbishment, life extension facilities, supply of military products as well as licensed production. The duo will also explore the export possibility of the products to reach out global demands.
Earlier on February 2, 2022, the company had signed a contract worth Rs 3,131.82 crore with the Indian Army. Under the contract, the company will manufacture and supply of Konkurs – M AntiTank Guided Missiles to the Indian Army in three years. “With this contract, the company’s order book position stands at Rs 11,400 crore (net),” BDL said in a statement.
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