BEL, Bharat Dynamics and other defense stocks in demand amid order wins - why analysts upbeat on sector
BEL has won an order worth Rs 4,300 crore from armed forces, similarly, Bharat Dynamics, Cochin Shipyard, and Garden Reach has also won an order of Rs 8,161 crore, Rs 9,805, and Rs 3,500 crore, respectively, from the Ministry of Defence.
Defense stocks were in demand during Friday’s trading session as Bharat Electronics Limited (BEL), Bharat Dynamics, Cochin Shipyard, and Garden Reach Shipbuilders shares jumped up to nine per cent on the back of winning respective orders from the government and armed forces.
Individually, Garden Reach Shipbuilders shares were up over nine per cent to hit a day’s high level of Rs 474 per share, followed by Cochin Shipyard surged by eight per cent to Rs 496 apiece, and Bharat Dynamics shares, trading near a 52-week high, grew by six per cent to Rs 1012 apiece on the BSE.
Similarly, BEL shares hit the day’s high level at Rs 98.35, up around 7.5 per cent on the BSE intraday. Global brokerages are upbeat on the company’s shares amid positive outlook and order win.
With the theme of Aatmanirbhar Bharat, the government is pushing for indigenisation with respect to the defense segment.
In this regard, BEL has won an order worth Rs 4,300 crore from armed forces, similarly, Bharat Dynamics, Cochin Shipyard, and Garden Reach has also won an order of Rs 8,161 crore, Rs 9,805, and Rs 3,500 crore, respectively, from the Ministry of Defence.
While speaking to Zee Business, Anand Rathi Financial Services, Executive VP – Equity Products Support, Siddharth Sedani believes that the order flows momentum in the defense sector would continue and expected it to be bumper for the space going forward.
He added that orders give visibility to the strong revenue outlook of these companies and the sector, which is seen as small today, will be an influential one in the next five years.
Meanwhile, Ashwin Patil, Senior Research Analyst at LKP Securities said that the FY23 was a good year for the defense sector with the central government emphasising more and more on indigenisation as they produced a long list of products to be procured from India.
In FY24, the market analyst expects the huge orders received by the defense companies last year from all the faculties of defense ministry to start delivering and add to the numbers this year.
Minutes before the market close on Friday, BEL, Bharat Dynamics, Cochin Shipyard and Garden Reach were up between 4-6 per cent on the BSE.
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