JP Morgan bullish on 3 PSU defence stocks for up to 20% gains
The brokerage bets on defence PSU stocks considering strong opportunity offered after the recent correction.
After specular gains amid buying in most of the pockets post the landslide victory of BJP in Maharashtra elections, defence stocks surged sharply up to 6 per cent. Now amid such gains post reasonable correction in the pack, global brokerage on defence stocks remains mixed on the different stocks in the pack.
High m-cap in comparison to net worth
Earlier a report stated that several non-financial PSUs traded at extremely high m-cap in comparison to profits, net worth or assets.
Bharat Electronics
On the stock, the brokerage initiates overweights with a target of Rs 340, implying an upside of over 16 per cent from the last close.
Hindustan Aeronautics
The brokerage has initiated an overweight call with the target of Rs 5,135, implying gains of 20 per cent from the last close.
Mazagon Dock Ship Builders
The brokerage initiates 'neiutral' rating on the stock with a target of Rs 4,248- implying gains of nearly 2 per cent2
Rationale for defence stock picks
The brokerage is bullish on the long runway of structural growth offered by these companies which it considers as a good bet post the recent price correction.
The brokerage also pointed at the strong growth in defence production and exports. For exposure to structural growth, BEL is preferred pick, it added.