Shares of companies in defence sector get indigenisation boost

NEW DELHI: Shares of companies related to the defence sector are sailing northwards, with the government’s efforts to indigenise more defence equipment as well as boost their exports energising investor sentiment.

The ‘Fourth Positive Indigenisation List’ of 101 defence items was announced by Prime Minister Narendra Modi on Wednesday,

which also means that domestic players related to the multi-billion dollars worth defence segment, will have increased business opportunities.

An analysis of the stocks of companies that have businesses related to the defence space showed that most of them have gained since Wednesday.

Mazagon Dock, Bharat Dynamics, Cochin Shipyard, Mishra Dhatu Nigam, Bharat Electronics, Bharat Forge, Astra

Microwave Products and Paras Defence and Space Technologies, are among the companies that have gained as much as 5% in two trading days, Wednesday and Thursday.

Analysts opined that broadly defence related stocks have been outperforming and are expected to continue to deliver good returns for investors.

Since the end of trade on 18 October till the close on 20 October, shares of Mazagon Dock rallied 5.39% and BEML jumped 4.43% on the BSE.

Similarly, Bharat Dynamics climbed 3.32%, Cochin Shipyard gained 2.82%, Mishra Dhatu Nigam Ltd advanced 2.18% and Bharat Electronics went higher by 1.93% during the period.

The stock of Bharat Forge gained 1.44%, Astra Microwave Products spurted 0.84% and Paras Defence and Space Technologies (0.26%) in the last two days.

Meanwhile, a few stocks remained muted. Shares of Data

Patterns (India) fell 3.86% and Hindustan Aeronautics dipped 1.18% during the period under review.

On Friday morning, however, most of the stocks were trading on a mixed note, while Bharat Dynamics climbed 2.76% and Paras Defence gained 0.35% higher.

The benchmark 30-share BSE Sensex was trading 266.77 points or 0.45% higher at 59,469.67 in the morning trade on Friday.

Defence stocks have been performing very well over the past three months. These lists improved the visibility of revenues for most defence-related companies and the government has also given a lot of orders to these companies to boost indigenisation, Deepak Jasani, Head of Retail Research at HDFC Securities, said.

Conglomerates Reliance, Tata, Adani and L&T also have presence in the defence segment.