Bharat Dynamics shocked the Dalal Street on May 25 after declaring a wretched performance in the fourth quarter. The revenues declined 41 percent year on year to Rs 797 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) at Rs 182 crore is 52 percent lower, while EBITDA margins declined 500 bps to 23 percent in the fourth quarter of FY23.

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Net profits are 42 percent lower at Rs 153 crore. The result disappointed streets and the stock tumbled 5 percent in the last half hour of trade.

Due to the ongoing Russia-Ukraine war, there were delays in receipt of certain electronic components and explosives from foreign OEMs which impacted the performance during FY23. The company said it is exploring alternatives to mitigate the impact.

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In FY23, the net profits declined 30 percent to Rs 352 crore, while revenues slid 12 percent to Rs 2,469 crore, compared with the management's earlier guidance of Rs 3,200 to 3,500 crore. It is noteworthy that the company clocked Rs 1,691 crore revenues in the initial nine months of FY23 and hence to achieve the target Rs 3,200 to Rs 3,500 crore revenue for full year, the ask rate for fourth quarter was very high.

During the FY23, the company has changed its accounting policy on “Customer Financed Assets" to be in line with the requirement of Ind AS 115. Due to the revision of accounting policy, Revenue from Operations has gone up by Rs 15 crore and profits have gone up by Rs 10 crore.

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The Company holds inventory valued at Rs 84 crore as at 31st March 2023 that was procured for certain orders. These orders were short closed by the customer. The company holds advance from customer of Rs 362crore relating to such orders. The inventories are non-moving for more than five years. The company contends that the customer has impliedly agreed to take over the inventory against the advance which is sufficient to cover the value of inventory. Hence no loss would be incurred by the company on this account and no redundancy provision is therefore considered necessary.

The aerospace and defence player has recommended a final Dividend at Rs 1.20 per share (face value of Rs 10/-each) for the year ended 31st March 2023. An interim dividend of Rs 8.15 per equity share was paid in the month of February 2023.

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