Top Mutual Funds
- 26 May 2023
- ICICIdirect Research
-
Share
-
-
-
-
-
BHARAT DYNAMICS MARGINS CAME IN LOWER THAN ESTIMATES ON HIGHER-THAN-EXPECTED RAW MATERIAL COST
BDL - 1747 Change: 176.80 (11.26 %)News: Revenue declined by 42.2% YoY to Rs 798.3 crore; primarily due to delay in supply of some raw material or components from OEMs and design changes in some products. Sequentially, revenue was up 73% as execution picked up QOQ. EBITDA margins came in at 23% (down 528 bps YoY); primarily due to negative operating leverage. Sequentially EBITDA margin is up 372 bps. EBITDA declined by 54.6% YoY (+106.3% QoQ) to Rs 183.4 crore. PAT came in at Rs 152.8 crore; down 40.2% YoY mainly led by decline in revenues and contraction in margins. For FY23, revenue is down 11.6% YoY to Rs 2489.4 crore as 2HFY23 revenue declined sharply by 42.3% YoY as against 94.4% growth in H1FY23. EBITDA margin for FY23 stands at 16.4% (down 937 bps YoY as others cost remained higher) leading to PAT de-growth of 28.3% YoY to Rs 352.2 crore
View: Significant de-growth in revenues was in-line with expectations as the provisional revenue was already declared by the company. However, lower than expected margins was a key negative surprise. Overall execution has been poor in 2HFY23 due to delay in supplies from OEMs and design changes in production of naval products, which has led to FY23 revenue de-growth of ~12% YoY. Long term outlook looks healthy considering the robust order-book position of Rs 24000 crore as of Mar-23 end (9.6x FY23 revenues) with healthy pipeline of orders. However, pick-up in execution and improvement in margins will remain the key monitorable for coming period.
Impact: Negative