Defence stocks in focus: Bharat Dynamics, Mazagon Dock, Cochin Shipyard share price hit 52-week high—What's driving rally in these stocks

Shares of defence stocks have been buzzing amid strong order book. Several stocks have hit 52-week high or are trading near their year-highs. On Friday, shares of Bharat Dynamics jumped over nine per cent to hit fresh 52-week high of Rs 949 per share on the BSE on Friday on ex-dividend date, while Mazagon Dock Shipbuilders jumped more than seven per cent to trade on new high value of Rs 457.50 a share on the BSE.  Besides, Cochin Shipyards share price too rose more than five per cent to touch 52-week high of Rs 408.40 apiece in BSE intraday trade on Thursday 

On Monday, Hindustan Aeronautics Limited (HAL) hit a record high of Rs 2639 apiece and closed over 7 per cent higher to Rs 2613.05 per share on the BSE.   

Bharat Dynamics dividend record date 2022

Earlier, the board of directors of Bharat Dynamics had announced a final dividend of Rs one per share. Bharat Dynamics dividend record date 2022 to ascertain eligibility is September 20, 2022. The stock started trading ex-dividend from Friday.  

Why Defence stocks are rallying?  

Reacting to recant rally in defence stocks, Ashwin Patil, Senior Research Analyst at LKP Securities, said defense sector is buzzing currently on the back of a strong order book, orders from GOI under the Ministry of Defence, technological advancements and requirements according to the geopolitical environment and export orders.  

Talking about the outlook, he says this orderbook gives us visibility for of up to 4-5 years as the country needs to match the international standards.  

Furthermore, profitability led by higher indigenisation theme, better operating leverage and higher contribution from non-government orders should augur well for the margins, said the expert. 

Defence Sector Valuation  

Patil said valuations too seem comfortable to us for the entire sector.  "Therefore, we are bullish on the sector, particularly on BEL due to additional positives like a lean balance sheet, better working capital management and emphasis on some non-profitable non-defence sectors," he added.