Indigenous defense capabilities need of the hour, says analyst Siddharth Sedani; picks 4 stocks with high growth potential from this segment

The world is on the edge now hoping that the Russia Ukraine conflict will calm down soon, Market Expert Siddharth Sedani said while giving his stock pick in the popular TV show ‘Sid ki SIP’. There is a concern of possibly a bigger war, he opined. 

The ongoing conflict has brought to the fore, the importance of having the indigenous defense capabilities, he highlighted. In view of this, Sedani picked defence as his latest theme for stock recommendations. 

Sedani said that Government of India (GOI) might start exporting defence equipment worth USD 5 bn in the next two years. The government has also talked about becoming 70 per cent self-reliant in terms of the country’s defence by 2027.

Private sectors can also get big opportunities due to the government’s focus on a self-reliant defence system, Sedani added. 

He picked four stocks under this them, which he said have great potential for high returns.

Bharat Electronics

Sedani recommended a target of Rs 243, with an allocation of 30 per cent and a return expectation of 15 per cent. The company has an order book worth Rs 56000 crore.

They have major contributions in air missiles, Akash missiles and battlefield surveillance systems of the country. In addition to the possible margin of 20 per cent to 22 per cent, the company can grow by 12 per cent to 15 per cent, Sedani opined.

Hindustan Aeronautics Limited

He recommended HAL as his next pick with price target of Rs 1600. The allocation,should be 30 per cent and an expected return is 15 per cent, he added.

This is the one and only largest manufacturer of helicopters, aircraft, and other systems in India, the market expert said. In addition to the expected CapEx, the company bagged a deal of 83 ‘Tejas’ air missiles worth Rs 54,000 crore in its kitty.

Mazagon Dock Shipbuilders Limited

Sedani suggested investors set a target for this company at Rs 300, with an allocation of 20 per cent and an expected return of 24 per cent.

The company is a major manufacturer of warships, submarines and others. The company has a Fixed Deposit of Rs 5000 crore to Rs 7000 crore in the bank, which bears an interest income worth Rs 500 crore to Rs 700 crore.

Cummins India

This company is one of the leading companies that manufacture engines in India which could be useful in vehicles used for defence needs . He recommended a Target of Rs 1156 and an allocation of 20 per cent with an expected return of 21 per cent in a year.

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