Bharat Dynamics shares down 25% from record high; should you enter at current levels?

Shares of Bharat Dynamics Ltd (BDL) on Tuesday extended their fall for the second straight session. The stock settled 0.42 per cent lower at Rs 1,337.90. At today's closing price, BDL has slipped 25.45 per cent from its all-time value of Rs 1,794.70, a level seen on July 5 this year.

During the June 2024 quarter (Q1 FY25), the defence PSU recorded an 82.8 per cent decline in its net profit, at Rs 7.21 crore, as against Rs 41.81 crore in the year-ago period. Revenue from operations in Q1 FY25 declined 35.8 per cent to Rs 191.16 crore from Rs 297.72 crore in the corresponding period last year.

"The state-run firm's quarterly results were a bit disappointing. Although, investors with a long-term view can hold on to the stock, given the momentum in the defence sector and the company's growth perspective. For fresh buying, one can consider adding this stock on dips," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

BDL's stock has experienced a significant correction from its all-time high levels, said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

"Technically, the major support zone placed at Rs 1,200 is expected to prevent further decline, while a breakdown below this level could change the technical outlook over the same period. On the upside, there is an intermediate resistance at the Rs 1,440-1,450 range. A decisive breakthrough above this resistance could potentially generate new buying interest in the stock," Krishan mentioned.

"Immediate support will be at Rs 1,300 and resistance at Rs 1,350. A decisive close above Rs 1,350 level may trigger a further upside to Rs 1,400. The expected trading range will be between Rs 1300 and Rs 1400 for the short-term," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

One can consider buying the stock around Rs 1,320 level, expecting a target price of Rs 1,450, said Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking. Singh added that a stop loss should be placed at Rs 1,290 for this trade.

Bharat Dynamics is a public sector undertaking (PSU) under the defence ministry. As of June 2024, the government held a 74.93 per cent stake in the PSU.