Stock Market today: The defence stocks as HAL, BEL to Bharat Dynamics dipped during the intraday trades on Tuesday after Trump-Zelensky meeting
The defense stocks have remained in focus and continued to gain in the past few months. While the operation Sindoor and the India-Pakistan conflict led to a sharp rise in the inflow of orders for domestic defense manufacturers such as Hindustan Aeronautics Ltd, Bharat Electronics Ltd, and Bharat Dynamics Ltd, among others, the hopes also remained high for export orders rising amidst geopolitical conflicts.
However, the share price cooled down slightly on Tuesday following the Trump-Zelensky meeting.
Defence stocks as HAL, BEL, Bharat Dynamics share price movement
The HAL share price and BEL share price dipped more than 1% during the intraday trades on Tuesday, while the Bharat Dynamics, or BDL, share price dipped more than 3%.
Nevertheless, despite cooling down, the defence stocks, such as Hindustan Aeronautics Ltd., Bharat Electronics, and Bharat Dynamics, or BDL, among others, have risen 33-50% in the past 6 months.
Strong Q1 results have added to confidence for Defence stocks as HAL, BEL, Bharat Dynamics
The Q1 performance of defense stocks remained strong, adding to confidence.
Defence stocks Hindustan Aeronautics (HAL) and BEL beat Jefferies’ margin estimates with strong margin expansion of 831 bps and 385 bps year-on-year, respectively, driving the overall margin improvement. Jefferies India Ltd. highlighted that both management teams guided for margins sustaining or improving from FY25 levels on account of operating leverage.
Defence stocks as HAL, BEL, Bharat Dynamics- Analyst views
Jefferies India Pvt Ltd believes that the recent Indo-Pak conflict will enhance the domestic defence manufacturing focus, and estimate 14% CAGR in domestic defence capital spends over FY25E-30
HAL qas per Jefferies has 5-year growth visibility of 19% Earnings per share CAGR, driven by indigenisation, which should keep multiples elevated
Analysts believe HAL’s execution on the deliveries of Tejas Mk1A aircrafts will be a key monitorable in the coming quarters.
However, Amit Anwani, Research Analyst of PL Capital Group, says that HAL is a long-term play on the growing strength & modernization of India’s air defense given that it is the primary supplier of India’s military aircraft, The long-term sustainable demand opportunity owing to the government’s push on indigenous procurement of defense aircraft is positive for HAL. Also a robust order book with a 2-year pipeline of Rs1.0 trillion plus and leap in HAL’s technology are other positives.
Disclaimer: The views and recommendations above are those of individual analysts or brokerage companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
