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Business Standard
3 days ago
- Business
- Business Standard
GRSE, BDL among 9 defence stocks up over 70% in 2 mths; time to book gains?
Shares of Indian defence-related companies have witnessed a spectacular bull-run on the BSE and the NSE in the last two months, with the success of ' Operation Sindoor ' adding fire-power to already pumped-up shares in the month of May. The NSE Nifty Defence index has zoomed as much as 59 per cent from its April 7 low of 5,645 to the current 8,970 levels. In comparison, the NSE Nifty 50 index has gained 14 per cent in the same period. Among the Nifty Defence constituents - 50 per cent of the stocks i.e. 9 out of the 18 defence shares have zoomed more than 70 per cent in the last two months, shows ACE Equity data. Garden Reach Shipbuilders & Engineers (GRSE) is the top mover, the stock has soared 138 per cent. It is followed by Data Patterns (India), which has zoomed 114 per cent. Paras Defence And Space Technologies, Astra Microwave Products, Mishra Dhatu Nigam (Midhani), BEML, Bharat Dynamics (BDL), Cochin Shipyard and Solar Industries India are the other 7 stocks, up in the range of 70 - 98 per cent. Given the recent sharp rally, analysts recommend it won't be a bad idea to take home some profit off the table, but remain optimistic of the future growth prospects. Kranthi Bathini, director - equity strategy at WealthMills Securities says that defence stocks seem to be fully priced-in at current levels; hence taking some profits from the medium-to-short term seems advisable. On the downside, these stocks could correct between 15-20 per cent, the analyst said. However, the long-term outlook for defence stocks remains upbeat given India's focus on domestic manufacturing, coupled the with export market. The order book and earnings visibility looks very good for these companies, Kranthi added. That apart, post Operation Sindoor, analysts believe the Indian government may increase Budget outlay for the defence sector. Reports indicate that India's defence budget may receive an additional allocation of ₹50,000 crore under a supplementary budget. In the Union Budget presented on February 1, Finance Minister Nirmala Sitharaman had earmarked a record ₹6.81 trillion for the defence sector for FY26, an increase of 9.2 per cent when compared to the budget allotment of ₹6.22 trillion in FY25.
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Business Standard
16-05-2025
- Business
- Business Standard
Banks, defence, OMCs: Which PSU stock to buy now? Analysts pick top bets
PSU stocks to buy: Once Street's favourite, shares of public sector undertakings (PSUs) have not yielded much returns to investors so far this year. Excluding the recent rally in defence shares, only a handful PSU stocks have outperformed the benchmark Nifty50 index during the period. So far in calendar year 2025 (till May 14), the Nifty CPSE index has risen 4.14 per cent, in-line with the Nifty50 index's gain of 4.3 per cent, ACE Equity data shows. By comparison, the Nifty CPSE index climbed 25.25 per cent in CY 2024 and 73.7 per cent in CY 2023 as against the benchmark's rally of 8.8 per cent and 20.2 per cent in the respective years. The trend, analysts believe, may not change much in the coming months and investors should cherry-pick PSU stocks based on valuation comfort along with earnings growth visibility and policy support. "The universe of PSU stocks is huge and diverse. Investors should bet on specific sectors and stocks from the basket as most of them may continue to consolidate after years of outperformance," said Kranthi Bathini, director of equities at WealthMills Securities. Among individual stocks, Bharat Dynamics, Mazagon Dock Shipbuilders, Garden Reach Shipbuilders, Bharat Electronics, Mishra Dhatu Nigam, Hindustan Aeronautics, and Cochin Shipyard from the defence pack have surged between 10.4 per cent and 59.3 per cent this year. While the rally in defence-related PSU counters was on the back of India - Pakistan geopolitical conflict, shipbuilding stocks found favour amid the government's strong focus on improving India's maritime infrastructure and indigenisation push. Outside these baskets, only NBCC (India), Steel Authority of India (SAIL), Bharat Petroleum Corporation of India (BPCL), Indian Oil Corporation, NMDC, and MOIL have outperformed the benchmarks by rising up to 15 per cent during the period. Among stocks, outside of the CPSE basket, PSU banks like Union Bank of India, Bank of India, Indian Bank, and Canara Bank outran the Nifty50 index by rallying in the range of 5.5 per cent to 12 per cent. "PSU stocks are affected a lot by the government policies as the ownership and regulatory control rest with them. Investors should, thus, invest in companies which are, relatively, stable from a policy viewpoint, are non-cyclical in nature, and have high dividend yields," said Deepak Jasani, a stock market veteran. High dividend yield, he added, provides a margin of safety against any decline in stock prices. PSU stocks to buy From an investment perspective, analysts say investors interested in the PSU space could look at opportunities across sectors driven by strong policy support, infrastructure momentum, and improving fundamentals. Industries such as oil and gas, and metals, which are cyclical in nature, may be avoided as cycles are difficult to predict and impacted by macro variables, they advise. "While we have a 'neutral' view on the PSU sector, investors willing to invest in PSU stocks can look at the renewable energy and/or transmission infrastructure sector amid the government's policy push. Defence companies, too, may remain in focus as exports are expected to surge to ₹50,000 crore by fiscal year 2029-30 (FY30) with indigenous production ramping up from ₹1.6 trillion to ₹3 trillion," said Anil Rego, founder and fund manager at Right Horizons PMS. Deepak Jasani, meanwhile, backs PSU stocks from the metal, oil refining, banking space on the back of their dividend yielding potential. "PSU banks are the safest sector to be in. That apart, oil refining companies, and energy-linked companies like Gail (India) and Coal India, which are insulated from global developments, can be a good bet," he said. Echoing similar views, Kranthi Bathini of WealthMills Securities said selective outperformance could be seen in PSU banks, defence, and OMC stocks going ahead.
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Business Standard
14-05-2025
- Business
- Business Standard
Micro, small, midcap indices outrun Nifty 50 in recent market pullback
Micro, small, midcap indices on the National Stock Exchange (NSE) have outperformed the Nifty 50 in recent market pullback triggered by the India – Pakistan truce on the boarders, shows data from ACE Equity. While the Nifty Microcap 250 index has rallied around 6 per cent from its closing level on Friday, May 9 till May 13, the Nifty Smallcap 100 and the Nifty Midcap 150 indices have moved up 5 per cent and 4 per cent respectively during this period, shows ACE Equity data. In comparison, the Nifty 50 index has gained 2.4 per cent. (See graphic below) The outperformance in a lot stocks from the micro, small-and midcaps, said Kranti Bathini, Director-Equity at WealthMills Securities, has been on account of a positive earnings surprise in the March 2025 quarter (Q4-FY25). 'Mid-and smallcaps had been in a consolidation phase since long. Q4FY25 earnings for a lot of companies in these segments surprised positively, which triggered an up move. Though one cannot paint the entire sector with the same brush, it is advisable to take some profit off the table right now. Valuations for some of the stocks in the micro, small-and midcap baskets is still steep and prone to a correction. One has to be stock specific from here on,' he said. Microcap, Midcap, Smallcap indices At the stock level, Tanla Platforms, Syrma SGS Technology, Bharat Dynamics, Olectra Greentech, Nippon Life India Asset Management, The Jammu & Kashmir Bank, Reliance Power and Escorts Kubota gained between 11 per cent and 19 per cent during the recent market pullback, data shows. K.P.R. Mill, Jyothy Labs, United Breweries, Navin Fluorine International, Chambal Fertilisers and Chemicals and UPL Ltd., on the other hand, lost ground. The Nifty 50, according to analysts at IDBI Capital, is trading near one standard deviation above its 10-year average based on one-year forward earnings per share (EPS) estimates. 'In the absence of strong domestic catalysts and amid external policy risks, we expect the market to remain range-bound in the short term. As a result, we anticipate a more stock-specific environment going forward, where select stocks will outperform,' wrote Pravin Bokade and Shreejit Nair of IDBI Capital in a recent note. Technical view on the markets Those at Angel One, too, remain constructive on the markets and suggest investors adopt a 'buy on dips' strategy. Technically, considering the retracement of Monday's rally (from Friday's low), the 61.8 per cent level around 24330, which also marks the start of the bullish gap left, is seen as a crucial support for the Nifty 50 index now. A breach below this level could see the ongoing up-move fizzle out. The 50 per cent retracement at 24,450 levels serves as immediate support for Nifty 50. "On the upside, 24750 and 24900 are the key resistance levels to watch. Traders can continue to focus on mid-and small-caps, but should adopt a selective approach," advises Sameet Chavan, head of research for technical and derivatives at Angel One.
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Business Standard
30-04-2025
- Business
- Business Standard
Mutual Funds increased stake in 14 pharma stocks in Q4FY25; do you own any?
Shares of pharma sector companies continue to remain on investor's radar as the sector awaits the anticipated US tariff announcements on pharma imports. While increasing tariffs by 10 per cent across-goods, the US President Donald Trump said that tariffs on pharma imports will be announced at a later date. The US President stated that he would impose "major" tariffs on pharmaceuticals in the near future, a move that could end decades of low-cost global trade in medicines. However, recent reports suggest thae Donald Trump was open to offer some exemptions to his 10 per cent baseline tariff, to select selectors including auto ancillaries and electronics among others. As the suspense over the US tariffs on the pharma industry continues, shares of pharmaceutical companies have recovered notable ground in the month of April thus far. As many as 82 pharma stocks outperformed the Nifty Pharma and Nifty Healthcare indices - gaining over 4 per cent; with the top 3 rallying more than 50 per cent. READ MORE Meanwhile, as per the shareholding pattern at the end of March 2025 quarter domestic mutual funds (MFs) have increased stake in a total of 38 pharma and healthcare related stocks. Out of which, MFs increased stake in 14 pharma stocks by more than 10 per cent each. Analysts believe that pharma as a sector is well-positioned to counter any potential impact of tariff hikes, as it can easily pass on the additional costs by hiking prices of the medicines. Kranthi Bathini, Director-Equity strategy at WealthMills securities says that medicines have an inelastic demand, so even if there are tariffs imposed on the sector it could not have much impact on the industry in the longer-run. Additionally, pharma as a sector has shown some signs of recovery in the last one year, after a prolonged period of under-performance in the preceding two years. At present levels, valuations look attractive for the pharma sector, hence it is attracting buying interest, Kranthi added. Data from ACE Equity shows that MFs raised stake in Brooks Laboratories by 156 per cent, from 3.86 per cent at the end of December 2024 quarter to 9.9 per cent at the end of March 2025 quarter. Similarly, MFs increased stake in Onesource Speciality, Indegene and Zota Heath Care by 86.8 per cent, 57.9 per cent and 50 per cent, respectively. MFs now own up to 8.32 per cent, 2.65 per cent and 0.03 per cent, respectively, in each of the above mentioned companies. Among prominent names, MFs raised shareholding in Granules India from 10.39 per cent to 11.57 per cent. In Dr. Reddy's Laboratories from 11.14 per cent to 12.89 per cent; Neuland Laboratories from 6.29 per cent to 7.43 per cent; Aarti Drugs from 7.78 per cent to 8.75 per cent and GlaxoSmithKline Pharma from 4.96 per cent to 5.17 per cent. These apart, MFs have also hiked stake in other notable pharma companies such as - Marksans Pharma, Wockhardt, Cipla, Piramal Pharma, Glenmark Pharma, Zydus Lifesciences, Divi's Laboratories, Aurobindo Pharma, Biocon, Lupin and Pfizer by 3 - 7 per cent. On the other hand, MFs have decreased holdings in Supriya Lifescience, Vimta Labs and Suven Life Sciences by over 100 per cent each. Strides Pharma, Emcure Pharmaceuticals, Laurus Labs, AstraZeneca Pharma, Concord Biotech, Gland Pharma, Unichem Laboratories and Mankind Pharma were among the prominent stocks wherein MFs stake has declined.
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Business Standard
28-04-2025
- Business
- Business Standard
Mid, smallcaps outrun large-cap peers in recent market pullback. Will it last?
Midcap and smallcap indices have outrun their large-cap peers in the recent market pullback, shows data even as markets grappled with the recent geopolitical tensions between India and Pakistan. From a level of 21,744 hit on April 7, 2025 on tariff fears, the Nifty 50 index has gained around 9 per cent to 24,260 levels by April 28. The Nifty Midcap 100 and the Nifty Smallcap 100 indices, however, gained over 10 per cent each during this period, ACE Equity data shows. The overall market pullback, according to analysts, has been on account of delay in implementation of higher tariffs by US president Donald Trump. The markets, for now, have also taken geopolitical tensions between India and Pakistan following the killing of civilians in Pahalgam recently in their stride. The mid-and smallcap segments started to outperform once there was some clarity on the tariffs, said Ambareesh Baliga, an independent market expert. Typically in any market pullback, he said, the mid-and small-cap segments always do better as they are the favourite segments of the retail investors. 'I don't see the overall markets continuing to move up much in the short-to-medium term due to the geopolitical situation between India and Pakistan. Tough Trump tariff fears have now gone into the background, the markets have not yet fully discounted the worst of the geopolitical concerns. As things stand, investors should sell the rallies, but should not empty out their portfolios. It is better to stay in cash for now,' Baliga advises. Movers and shakers Among individual stocks that comprise the mid-and smallcap segments on the NSE, Dixon Technologies, Waaree Energies, Data Patterns (India), Godfrey Phillips India, Devyani International, AU Small Finance Bank and KFin Technologies are some of the counters that have gained over 20 per cent during the above-mentioned period, ACE Equity data shows. Indian stock markets, according to G Chokkalimgam, founder and head of research at Equinomics Research, would continue to recover in the short-term and suggest investors focus on domestic demand-driven stocks to minimize risk. 'Highly conservative investors might keep 50 per cent allocation to large cap (top 100) stocks as DIIs would continue to focus on the large cap segment in any possible event of market stress. Those who have an appetite for risk can consider 60 per cent to 70 per cent allocation to quality small-and mid-cap stocks with focus largely on domestic demand for possible wealth creation,' he said. Tech view On the technical front, the Nifty, said Sameet Chavan, head of research (technical and derivative) at Angel One, has confirmed a strong bullish breakout on the charts as it surpassed the February-March swing highs. 'On the upside, while the broader trend remains bullish, Nifty has an immediate resistance at 24,250–24,350 levels. A move above this zone would confirm a continuation of the primary uptrend. Traders should stay cautious and monitor these key levels, as the next leg of the move may not be as smooth as the recent rally. A selective approach toward midcap stocks is advisable,' Chavan said.
