ICICI Securities Lists 3 Defence Stocks With Buy Call: Large-Cap, Mid-Cap, & Small-Cap Stocks

ICICI Securities list 3 stocks from the Defence sector, namely Bharat Electronics, Bharat Dynamics, and Astra Microwave Products. Among these 3 stocks, Bharat Electronics, and Bharat Dynamics are PSU stocks. Bharat Electronics is a Navratna CPSE, while Bharat Dynamics is Miniratna Category-1 CPSE. On the other hand, Astra Microwave Products is a private-sector company.

June Digest: Agreements with US and P-75I hog the limelight

According to ICICI Securities, The defence sector in Jun'23 was abuzz with twin events: 1) MoU between ThyssenKrupp Marine System (TKMS) of Germany and Mazagon Dock Shipbuilders (MDSL) to jointly bid for P-75I project; and 2) MoU between GE and HAL to produce F-414 fighter jet engines for Tejas Mk2, including transfer of technology (ToT) to the extent of 80%. "Close on the heels of these MoUs, we saw further developments with 1) Hanwha Ocean (South Korea) expressing interest in participating in RFP for P-75I project; and 2) Safran offering full ToT for co-development of a new 110KN high thrust jet engine to power the AMCA Mk-2 stealth jet. Apart from these, the two agreements currently under discussion pertaining to the Security of Supply Arrangement (SOSA) and the Reciprocal Defence Procurement Agreement (RDP) are likely to benefit domestic companies such as MIDHANI," the brokerage has said.

It added, "On ordering front, Bharat Electronics (BEL) received orders worth Rs80bn, MDSL received a contract of Rs27.5bn for Medium Refit and Life Certification (MRLC) of SSK Class submarine from MoD and MIDHANI has received a contract for Kanchan armour module from AVANI. In Q2FY24E, we expect BEL's orderbook to be further boosted by long-term fuses order from the Indian Army."

It added further, "Besides, we expect further progress on Smart Anti-Airfield Weapon (SAAW), project Zorawar and development of air-launched variant of Amogha-III ATGM, benefitting Bharat Dynamics (BDL). We also believe Astra Microwave is likely to experience the tickle down benefits from the orders to BEL and BDL. We maintain BUY on BEL (TP: Rs150), BDL (TP: Rs1,325) and Astra (TP: Rs425) and recommend them as our key picks in defence space."

Stock Outlooks

1. Bharat Electronics Ltd. (BEL)

According to the given target price of Rs 150/share by the brokerage firm, the stock is likely to give 21% gains. The last traded share price of BEL on BSE is Rs 123.95/share, down 0.68% from its previous close. The stock is trading 2.78% down from its 52-week high of Rs 127.40/share. Its 52-week low is Rs 76.66/share.

In the past 1 week, the stock declined 1.51%, while jumped 25.43% in the past 3 months. It has given 57.22% in the past 1 year, 103.56% in the past 2 years, 264.88% in the past 3 years and 235.82% in the past 5 years, respectively.

The company has a market capitalisation of Rs 90,604.71 Crore. It is a large-cap company.

2. Bharat Dynamics Ltd. (BDL)

ICICI Securities assigns Rs 1325/share target price on BDL. If you buy the stock at the current market price, it can fetch you up to 21% gains. The stock's Current Market Price on BSE is Rs 1102.15/share. It is trading 13.14% down from its 52-week high of Rs 1247/share. Its 52-week low is Rs 678.70/share.

The stock declined 1.61% in the past 1 week. It jumped 13.57% in the past 3 months and 17.58% in the past 6 months. It gave 58.97% positive return in the past 1 year. In the past 2 and 3 years, it gave 195.64% positive return and 162.85% positive return, respectively. In the past 5 years, it gave 194.61% positive return.

BDL is a midcap company. It has a market capitalisation of Rs 20,200.34 Crore.

3. Astra Microwave Products

With the given target price of Rs 425/share, the stock of Astra Microwave is likely to give a decent return of up to 20% if purchased at the current market price. The stock on BSE last traded at Rs 355.40/share, 2.38% down from its previous close. The stock is trading 9.59% away from its 52-week high of Rs 389.50/share. Its 52-week low is Rs 204.25/share.

The stock declined 3.25% in the past 1 week. While it jumped 43.36% in the past 3 months. In the past 1 year, it jumped 70.41%. In the past 2 years, it jumped 107.11%, while in the past 3 years, it jumped 221.34%. In the past 5 years, it jumped 253.28%.

With a market capitalisation of Rs 3,374.35 Crore, it is a small-cap stock.

Disclaimer

The stocks have been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.