Defense Stocks: The Indian defense sector has delivered many multibaggers stocks in the last three years. The prices of these stocks were seen increasing by 3 to 10 times between September 2022 and July 2024, due to which investors got huge profits. However, profit booking started in these shares from July 2024 onwards. The NSE Defense Index has fallen by about 21 percent since July 2024. The prices of many shares have fallen by almost 50 percent from their peak. However, brokerage firm Antique Research says that after the recent fall, the prices of these defense shares have now become attractive.
The brokerage firm says that the growth prospects of the Indian defense sector have not weakened; In fact, their outlook has further improved with strong earnings prospects. The brokerage said that considering the earnings estimates of defense companies, their current valuations are not at all wrong. Moreover, the recent decline now provides another great opportunity to add these defense stocks to the portfolio.
Antique Research said that its favorite stocks in the defense sector include Hindustan Aeronautics (HAL), Bharat Electronics (BEL), Bharat Dynamics, Mazagon Dock Shipbuilders and PTC Industries.
The brokerage said that in the defense sector, there is generally more focus on government companies because their size and technology range has increased significantly. However, now private companies are also emerging rapidly in this sector, which can provide huge investment opportunities.
Antique Research said, “The most important thing is that there are a large number of companies in the defense sector, which are not yet listed on the stock market, but they have unique technology and capabilities. This is a sector which will be very exciting in the future. “We recommend buying on HAL, BEL, Bharat Dynamics and Mazagon Docks (purely defense PSU) and PTC Industries (an emerging global player in titanium and super alloys precision engineering).”
The brokerage said some defense companies have focused on larger ticket size products. These include light combat helicopters, light combat aircraft Mk 1A, and an upgraded version of the Su-30 MKI aircraft. Their total value is ₹2.2 lakh crore, due to which the growth of these companies has been fast. It also said that domestic defense production was more than ₹1.3 lakh crore in FY2024, which is expected to increase to ₹1.8 lakh crore in FY2025.
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