diff --git a/controllers/operator_controller.go b/controllers/operator_controller.go
index 8492bb8df..22a614358 100644
--- a/controllers/operator_controller.go
+++ b/controllers/operator_controller.go
@@ -175,6 +175,17 @@ func (r *OperatorReconciler) reconcile(ctx context.Context, op *operatorsv1alpha
 		return ctrl.Result{}, err
 	}
 
+	if isBundleDepStale(existingTypedBundleDeployment) {
+		apimeta.SetStatusCondition(&op.Status.Conditions, metav1.Condition{
+			Type:               operatorsv1alpha1.TypeReady,
+			Status:             metav1.ConditionUnknown,
+			Reason:             operatorsv1alpha1.ReasonInstallationStatusUnknown,
+			Message:            fmt.Sprintf("waiting for bundleDeployment %q status to be updated. BundleDeployment conditions out of date.", existingTypedBundleDeployment.Name),
+			ObservedGeneration: op.GetGeneration(),
+		})
+		return ctrl.Result{}, nil
+	}
+
 	// set the status of the operator based on the respective bundle deployment status conditions.
 	apimeta.SetStatusCondition(&op.Status.Conditions, mapBDStatusToReadyCondition(existingTypedBundleDeployment, op.GetGeneration()))
 	return ctrl.Result{}, nil
@@ -338,3 +349,8 @@ func mapBDStatusToReadyCondition(existingBD *rukpakv1alpha1.BundleDeployment, ob
 		ObservedGeneration: observedGeneration,
 	}
 }
+
+// isBundleDepStale returns true if conditions are out of date.
+func isBundleDepStale(existingTypedBundleDeployment *rukpakv1alpha1.BundleDeployment) bool {
+	return existingTypedBundleDeployment != nil && existingTypedBundleDeployment.Status.ObservedGeneration != existingTypedBundleDeployment.GetGeneration()
+}
diff --git a/controllers/operator_controller_test.go b/controllers/operator_controller_test.go
index f1764ca19..bae2cc63e 100644
--- a/controllers/operator_controller_test.go
+++ b/controllers/operator_controller_test.go
@@ -348,8 +348,31 @@ var _ = Describe("Reconcile Test", func() {
 				Expect(err).NotTo(HaveOccurred())
 			})
 
+			It("verify operator status when bundle deployment status is stale while being created", func() {
+				res, err := reconciler.Reconcile(ctx, ctrl.Request{NamespacedName: opKey})
+				Expect(res).To(Equal(ctrl.Result{}))
+				Expect(err).NotTo(HaveOccurred())
+
+				By("fetching the updated operator after reconcile")
+				op := &operatorsv1alpha1.Operator{}
+				err = cl.Get(ctx, opKey, op)
+				Expect(err).NotTo(HaveOccurred())
+
+				By("checking the expected conditions")
+				cond := apimeta.FindStatusCondition(op.Status.Conditions, operatorsv1alpha1.TypeReady)
+				Expect(cond).NotTo(BeNil())
+				Expect(cond.Status).To(Equal(metav1.ConditionUnknown))
+				Expect(cond.Reason).To(Equal(operatorsv1alpha1.ReasonInstallationStatusUnknown))
+				Expect(cond.Message).To(Equal(fmt.Sprintf("waiting for bundleDeployment %q status to be updated. BundleDeployment conditions out of date.", bd.Name)))
+			})
+
 			It("verify operator status when bundle deployment is waiting to be created", func() {
 				By("running reconcile")
+				bd.Status.ObservedGeneration = bd.GetGeneration()
+				By("updating the status of bundleDeployment")
+				err := cl.Status().Update(ctx, bd)
+				Expect(err).NotTo(HaveOccurred())
+
 				res, err := reconciler.Reconcile(ctx, ctrl.Request{NamespacedName: opKey})
 				Expect(res).To(Equal(ctrl.Result{}))
 				Expect(err).NotTo(HaveOccurred())
@@ -364,16 +387,18 @@ var _ = Describe("Reconcile Test", func() {
 				Expect(cond).NotTo(BeNil())
 				Expect(cond.Status).To(Equal(metav1.ConditionUnknown))
 				Expect(cond.Reason).To(Equal(operatorsv1alpha1.ReasonInstallationStatusUnknown))
-				Expect(cond.Message).To(ContainSubstring(`waiting for bundleDeployment`))
+				Expect(cond.Message).To(Equal(fmt.Sprintf("waiting for bundleDeployment %q status to be updated", bd.Name)))
 			})
 
 			It("verify operator status when `HasValidBundle` condition of rukpak is false", func() {
 				apimeta.SetStatusCondition(&bd.Status.Conditions, metav1.Condition{
-					Type:    rukpakv1alpha1.TypeHasValidBundle,
-					Status:  metav1.ConditionFalse,
-					Message: "failed to unpack",
-					Reason:  rukpakv1alpha1.ReasonUnpackFailed,
+					Type:               rukpakv1alpha1.TypeHasValidBundle,
+					Status:             metav1.ConditionFalse,
+					Message:            "failed to unpack",
+					Reason:             rukpakv1alpha1.ReasonUnpackFailed,
+					ObservedGeneration: 1,
 				})
+				bd.Status.ObservedGeneration = bd.GetGeneration()
 
 				By("updating the status of bundleDeployment")
 				err := cl.Status().Update(ctx, bd)
@@ -404,6 +429,7 @@ var _ = Describe("Reconcile Test", func() {
 					Message: "failed to install",
 					Reason:  rukpakv1alpha1.ReasonInstallFailed,
 				})
+				bd.Status.ObservedGeneration = bd.GetGeneration()
 
 				By("updating the status of bundleDeployment")
 				err := cl.Status().Update(ctx, bd)
@@ -434,6 +460,7 @@ var _ = Describe("Reconcile Test", func() {
 					Message: "operator installed successfully",
 					Reason:  rukpakv1alpha1.ReasonInstallationSucceeded,
 				})
+				bd.Status.ObservedGeneration = bd.GetGeneration()
 
 				By("updating the status of bundleDeployment")
 				err := cl.Status().Update(ctx, bd)
@@ -471,6 +498,7 @@ var _ = Describe("Reconcile Test", func() {
 					Message: "installing",
 					Reason:  rukpakv1alpha1.ReasonInstallationSucceeded,
 				})
+				bd.Status.ObservedGeneration = bd.GetGeneration()
 
 				By("updating the status of bundleDeployment")
 				err := cl.Status().Update(ctx, bd)
@@ -501,6 +529,7 @@ var _ = Describe("Reconcile Test", func() {
 					Message: "installing",
 					Reason:  rukpakv1alpha1.ReasonInstallationSucceeded,
 				})
+				bd.Status.ObservedGeneration = bd.GetGeneration()
 
 				By("updating the status of bundleDeployment")
 				err := cl.Status().Update(ctx, bd)