Bharat Dynamics Ltd could be entering a stronger execution phase after a challenging FY26, with ICICI Direct seeing significant earnings potential from the defence PSU's large order backlog. The brokerage has a Buy call on the Miniratna company with a target price of ₹1,585 per share, implying a 15.7% upside from Monday's closing price of ₹1,370.
The key change, according to ICICI Direct, is the resumption of Akash missile deliveries following pending clearances. Better execution of anti-tank guided missile orders could provide another meaningful catalyst as the company works through its sizeable backlog.

BDL ended FY26 with execution challenges, but the June quarter showed a sharp recovery. Last week, the company reported a more than six-fold jump in consolidated profit to ₹118.8 crore for the quarter ended June 30, 2026, from ₹18.4 crore a year earlier.
Revenue from operations more than doubled to ₹572.2 crore from ₹247.9 crore, while EBITDA swung to a profit of ₹83.1 crore from a loss of ₹45.4 crore in the year-ago quarter. EBITDA margin stood at 14.5%. The improvement came as revenue growth outpaced the rise in expenses.

Total income stood at ₹675.7 crore, including ₹103.4 crore of other income, while total expenses were ₹510 crore. Profit before tax rose to ₹165.6 crore from ₹23.1 crore a year earlier. Large backlog offers earnings visibilityBDL's order book stands at around ₹26,500 crore, equivalent to roughly 9.6 times trailing 12-month revenue, giving the company a sizeable base to work through as execution improves.
The company is targeting ₹15,000 crore of order inflows in FY27, while its longer-term goal is to reach ₹10,000 crore in annual revenue by FY31. That would imply a 32% revenue CAGR between FY26 and FY31. ICICI Direct expects the execution recovery to translate into strong earnings growth, forecasting around 30% CAGR each for revenue, EBITDA and PAT over the period.

Meanwhile, the broader defence sector is also in focus on Tuesday after the Department of Defence Production notified the sixth Positive Indigenisation List , comprising 405 strategically important defence items with an estimated business potential of ₹3,070 crore.
The list includes 389 items for Defence Public Sector Undertakings and 16 for the Indian Coast Guard. It covers line replaceable units, sub-systems, sub-assemblies, spares, components and raw materials across a range of defence platforms. The notified items include equipment and systems linked to platforms such as the Advanced Light Helicopter, Light Utility Helicopter, Su-30MKI, Light Combat Aircraft and AL-31FP engine, putting defence names including Bharat Electronics and Hindustan Aeronautics in focus alongside BDL.

BDL shares were trading at ₹1,393.10 on the BSE as of 2:30 pm on Tuesday, up 1.69% or ₹23.10 from the previous close. At Monday's closing price of ₹1,370, ICICI Direct's ₹1,585 target translates into an upside of 15.7%.