Defence stocks in focus: Defence stocks, which are already flying high so far this month, witnessed a further leg up on Tuesday, May 27, rising as much as 10% after the government approved the Advanced Medium Combat Aircraft (AMCA) Programme Execution Model.
The rise in defence stocks also added to the gains in the Nifty Defence index. The 18 stocks pack added over 1% to hit a fresh record high of 8,728.20 in intraday trade today.
According to analysts at IIFL, as quoted by Bloomberg, the sector could outperform others, with strong order visibility and positive sentiment helping sustain premium valuations. Besides increased spending on defense locally, global budgets too are growing, creating export markets for Indian companies, they say. Bharat Electronics is IIFL’s top pick by virtue of having the best execution track record among state-owned companies, the Bloomberg report added.
