3 defence stocks that can give up to 51% return; note down brokerage target prices
Defence Stocks to Buy: Brokerage firm ICICI Securities has advised buying three stocks from the defence sector. The stocks include Bharat Dynamics, Azad Engineering, and Dynamatic Technologies.
Bharat Dynamics, Azad Engineering, and Dynamatic Technologies: Defence sector stocks have been rising for nearly 3 years on the basis of strong order books. Given the government's focus on the defence sector, the outlook for defence stocks also looks better. Amid such a backdrop, brokerage firm ICICI Securities has advised buying 3 defence stocks- Bharat Dynamics, Azad Engineering, and Dynamatic Technologies. The brokerage says that investors can returns of up to 60 per cent in these stocks. In the last one year, all three stocks have turned multi baggers.
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(Disclaimer: The brokerage has given advice on investing in the stock here. These are not the views of Zee Business. Consult your advisor before investing.)
Bharat Dynamics share price target
ICICI Securities has upgraded PSU stock Bharat Dynamics to 'buy'. It has given a target price of Rs 1,745 for the defence stock. On August 13, 2024, the stock closed trading on BSE at Rs 1,336.20. In this way, the stock can give a strong return of about 31 per cent from the current price. If we look at the performance of Bharat Dynamics, the stock has given 139 per cent return in 1 year. Its year-to-date (YTD) return is 55 per cent.
Bharat Dynamics share price target
The brokerage says that Bharat Dynamics' performance has been affected due to supply chain problems, but the long-term outlook of the company is better. It says that the defence firm's EBITDA in the first quarter (Q1FY25) was weaker than expected. Due to the decrease in EBITDA, net profit declined to Rs 720 crore.
Bharat Dynamics share price target
The brokerage says the positive thing was that the Indian Air Force has approved DRDO and BDL for the production of 200 Astra air to air missiles for Su-3O and LCA Tejas fighter. The management has estimated revenue growth of 30–35 per cent for FY25, while the margin can be between 15–20 per cent.
Dynamatic Technologies share price target
ICICI Securities has also advised buying the Dynamic Technologies stock. It has given a target price of Rs 10,250. On August 13, 2024, the stock closed at 6,786. In this way, the stock can give a strong return of about 51 per cent from its current price. If we look at the performance of Dynamic Technologies, it has soared 75 per cent in the last one year. Whereas its YTD rise is 33 per cent.
Dynamatic Technologies share price target
The brokerage says that there may be a challenge in the near term due to problems in the global aerospace supply chain. The defence firm's performance remained stable in the first quarter (Q1FY25).
Dynamatic Technologies share price target
The brokerage says that the performance of the company's India business was better than overseas. There is a positive outlook on the company despite the current challenge in the supply chain, the brokerage says, adding that this is because the company has secured new contracts in Q4FY24, which can lead to earnings from FY27.
Azad Engineering share price target
ICICI Securities has advised buying Azad Engineering shares. The target price per share is Rs 2,450. The stock closed at 1626.25 on August 13, 2024. In this way, the Azad Engineering stock can give a strong return of about 51 per cent from its current price. The stock has given 141 per cent return in the last one year, whereas its YTD return is 141 per cent
Azad Engineering share price target
The brokerage says that the Azad Engineering's performance in the first quarter was as per estimates. Its revenue increased by 30 per cent, while operating profit (EBITDA) rose by 30 per cent Year-on-Year (YoY).
Azad Engineering share price target
The brokerage says that the company's order book is strong and it will add new customers in the future. It further says that in such a situation, the company can maintain high earnings, and its new 95,000m2 plant may be ready before FY26. This may provide visibility in the medium term, the brokerage says.