Bharat Dynamics stock: Top defence pick by SBI Securities' Sunny Agrawal for 2026

Bharat Dynamics Share Price: Sunny Agrawal, Head of Fundamental Equity Research at SBI Securities, said the long-term outlook for the defence sector remains positive. If the investment horizon is 5 to 10 years, the sector has potential to deliver very meaningful returns because defence companies have a robust order book and most of the companies are getting new orders continuously.

Sunny said Bharat Dynamics will be his preferred pick from the defence sector for 2026. He noted that the company has a strong order book of around Rs 23,000 crore and further improvement in execution will drive earnings growth.

“If I have to choose one company from the defence sector, I will recommend Bharat Dynamics Limited. The reason is that we have not seen much growth in the company’s earnings over the past two years due to supply-related issues. However, the stock has delivered a good rally due to valuation re-rating. Over the next two years, I believe execution will be very robust as supply-chain issues have largely been resolved,” he said.

“In the next two years, I expect Bharat Dynamics to report strong numbers and its profit could see a two-fold increase,” he added.

Sunny Agrawal said that Bharat Dynamics is his recommendation for long-term, at least for a period of 6 to 12 months. "Bharat Dynamics is a good stock to be in for a target of Rs 1800 in the next 6 to 12 months," he said. The target implies an upside of more than Rs 300 or 21 per cent from Thursday's (Dec 24) closing price of Rs 1,481.30 on BSE.

In FY25, the defence company reported a net profit of Rs 550 crore and “I expect the company to report a net profit of Rs 950 crore in the current fiscal and Rs 1,300 crore in FY27." Additionally, the company has a very strong order book of around Rs 23,000 crore, which will be executed over the next 4-5 five years. Besides, the order pipeline also remains healthy.

"Within the defence space, the overall order pipeline stands at around Rs 50,000 crore. I am expecting Bharat Dynamics to secure order inflows of Rs 15,000–20,000 crore," he said.

He further said that the Q2 results were very strong for the company, with a significant improvement in execution. In the coming quarters, execution of orders will further boost earnings growth. On the valuation front, he noted that Bharat Dynamics is trading at a price-to-earnings multiple of 49 based on FY27 estimates.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)