Shares such as paras protection, garden shipbuilders, data patterns, cochin shipyard, mazagon dock shipbuilders and Hindustan aeronautics saw significant benefits. Stress on the control (LoC) line continues in the wake of the terror attack, while multiple ceasefire violations have been reported on the weekend.
In reply, India has taken several steps, including suspension of the Indus Water Treaty, preventing activities on the Wagah border, and leaving Pakistani citizens to leave the country. Defense Minister Rajnath Singh is still ready to meet with Prime Minister Narendra Modi.
Read more: Uri or Balkot style, Indo-Pakistan collision cannot be ruled out; Share markets can affect the economy: Swaminathan Ayer
These are also in spotlight defense stocks because India and France 26 Rafael-M Fighter Jet costs Rs. Ready to announce the expiry of the 63,000 crore deal. The first delivery is expected in about three and a half years, with the contract to be completed in six-and-a-half years.
On the stock front, the Nifty India Defense Index emerged as a top gainer, which is 11.5% higher. Other stocks like data patterns, cochin shipyard and India mobility also saw a gain of 9.6%, 7%and 6%, respectively. Hindustan aeronautics increased by 5%. The Nifty India defense index has increased by 4%.
Analysts suggest that companies with strong financial, strong execution and India’s national defense strategy will benefit the most.
“We believe that the government’s efforts for indigenous defense production are likely to bear fruits for the middle to long -term long -term long -term long -term fruits,” said Atish Matlawala, a basic analyst for SSJ Finance and Securities.
He said, “We like Bell, Mazagon Dock and Shipbuilders and India Dynamics Limited because these companies have strong orderbooks, have a reasonable evaluation, and importantly not based on foreign cooperation for technical transfer in the case of HAL.”
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Should you buy defense stocks now?
Analysts say that tensions with Pakistan are temporary and they do not see any basic shift that guarantees aggressive fresh purchases at this stage. However, investors entering the lower level may continue, but new entrants should wait more clarity on more attractive entrance points or development.
In individual stocks, Matlawala likes Bell, Mazagon Dock and Shipbuilders and India’s mobility in the long run because these companies have strong orderbooks, reasonable evaluation and more importantly, in the case of HL, not based on foreign cooperation for technical transfer.
Bell defense is the leader in electronics and radar. It directly benefits from the increasing investment in surveillance, communication and electronic war systems. Currently, Bell trades at P/E of 43x with 30X EV/EBITDA.
Meanwhile, following enhanced conditions awareness, intelligence capabilities and electronic excellence, Paras defense plays an important role in multiplying and threatening force in counter-terrorism and cross-border operations. Currently trades at P/E of 84x with EV/EBITDA of Persus 48X.
Bigul’s CEO is a contradictory point of view of Atul. “The current evaluation looks more reasonable after the correction, the field trade is slightly discounted in its recent premium levels.”
(Connection: The recommendations, suggestions, opinions and opinions provided by experts have their own. This does not represent opinions of economic time)
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