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Economic Times
21-05-2025
- Business
- Economic Times
Will drone stocks continue to soar after recent military conflict?
Shami said the outlook from a valuation perspective is not exciting any more since drone stocks are trading in a high P/E range. Since the Pahalgam attack on April 22, Paras Defence and Space Technologies, Ideaforge Technology and Zen Technologies have soared 30-50%, amid a broader euphoria among defence-related stocks. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Mumbai: Drone makers have caught the fancy of Dalal Street punters, spurred by the extensive use of these aerial systems in the recent India-Pakistan conflict. Shares of companies that make drones, such as Hindustan Aeronautics Ideaforge Technology and Zen Technologies , have jumped as much as 50% since May 7 - the day India launched its military response, dubbed Operation Sindoor , in response to a terrorist attack at Pahalgam on April 22."Some stocks in the listed space are directly engaged in defence related drone manufacturing which are likely to be the biggest beneficiaries; however, others have moved up largely due to the sentimental push," said Bhalchandra Shinde, associate fund manager, Motilal Oswal the Pahalgam attack on April 22, Paras Defence and Space Technologies, Ideaforge Technology and Zen Technologies have soared 30-50%, amid a broader euphoria among defence-related Baliga, a Mumbai-based independent analyst, said the momentum is strong in drone stocks and can move 15-20% higher from the current Operation Sindoor, drones were used for surveillance and combat. Investors expect the government to spend more over the next five years to boost the use of drones. According to Grand View Research, the India military drone market generated a revenue of $1,527.1 million in 2024 and is expected to reach $4,082.1 million by 2030. The domestic market is expected to grow at 17.9% on a compounded basis from 2025 to 2030, it the steady growth estimates, fund managers and analysts advise caution while riding the bullish momentum in these stocks, as recent gains have already baked in expectations of increased orders for drones in the near future."Drone usage has come to the fore in the recent conflict and government focus is expected to remain on the companies which could lead to expansion in order books however, these positive are significantly priced in the stocks already," said Ashwini Shami, EVP & Portfolio Manager, OmniScience said the outlook from a valuation perspective is not exciting any more since drone stocks are trading in a high P/E names within the segment such as Hindustan Aeronautics and Bharat Electronics are preferred picks given the stronger moat and larger order books and are reasonably valued relative to the other peers, said Shami. The Nifty India Defence Index jumped 17.9% and 15.4% since the Pahalgam attack and Operation Sindoor, respectively, while benchmark Nifty has moved 2.1% and 1.1% higher in the same period.
Mint
16-05-2025
- Business
- Mint
HAL, BEL, BDL: Defence stocks rally up to 40% post Operation Sindoor. Should you buy now for long-term gains?
Defence stocks, such as Bharat Dynamics (BDL), Bharat Electronics (BEL) and Ideaforge Technology, have posted strong gains in recent days amid expectations of sustained demand following Operation Sindoor. While the sharp rally has pushed valuations higher, analysts believe select defence names still offer attractive long-term investment potential. India launched Operation Sindoor on May 7, targeting terror camps in Pakistan and Pakistan-occupied Jammu and Kashmir to avenge the victims of the Pahalgam terror attack on April 22, which left 26 persons dead. India's action against terror camps demonstrated the effectiveness, efficiency, and strength of indigenous defence equipment. Experts pointed out that the India-Pakistan conflict has brought global attention to the performance, quality, and impact of Indian-made defence systems — a development that could lead to increased international orders in the coming years. The expectations of robust demand, defence stocks have surged between 5-40 per cent since May 8. Shares of Ideaforge Technology, Mishra Dhatu Nigam, Zen Technology, Data Pattern, BDL, BEL, Bharat Forge, BEML and Hindustan Aeronautics (HAL) have surged more than 10 per cent since then. "Defence stocks have been rallying strongly, driven by the success of indigenous defence equipment during the India-Pakistan tensions and robust government support for promoting domestic defence manufacturing," said Ajit Mishra, SVP of research at Religare Broking. "After India-Pakistan tension, global attention on India's defence sector has increased due to showcasing its defence prowess, capability and efficiency in the products, which can be one reason for the recent rally in assumption for global business export opportunities. At the same time, many defence stocks delivered stronger than expected Q4 earnings, which triggered an additional rally in the sector stocks," said Prashanth Tapse, Senior VP of research at Mehta Equities. Some experts believe that despite stretched valuations, the sector remains a healthy long-term bet as India's defence budget could be increased in the coming years due to security challenges. "Although the sharp rally has led to stretched valuations, the sector remains a compelling long-term investment opportunity. Ongoing geopolitical uncertainties and security challenges are expected to push India's defence budget—currently at 1.9 per cent of GDP—higher in the coming years, providing further momentum to the sector," said Mishra. Experts underscore that while stocks are trading slightly above fair valuation, earnings growth, similar to what they delivered in Q4FY25, can justify the current valuations. "Few stocks are trading as high as 120 times and as low as 40 times price to earnings, which is a very wide range for justifying expensive versus cheap. It is better to wait and watch for some correction in the price, reasoning that profit-booking attempts at higher levels. High valuations are justified due to massive visibility in future earnings, strategic importance, strong balance sheet with negligible debt and high order book momentum," said Tapse. Tapse believes the defence sector's long-term prospects are structurally positive, and the sector is poised for a multi-year growth story for a four to five-year period. "Post the current demonstration, it has enhanced investor confidence, and global attention can bring in high export potential business. We expect the Indian defence sector to witness a CAGR of 12–15 per cent over the next five years, driven by Make in India, export push, strong, increasing domestic procurement post India-Pakistan tension and higher capital expenditure in the annual defence budget," Tapse said. While the long-term prospects of defence stocks look compelling, experts warn investors should remain selective and cautious of near-term volatility, focusing on fundamentally strong companies to ensure sustained long-term growth. Tapse is positive about HAL. "A few favourite counters are trading at very high valuations and one, which is still looking long-term promising, is HAL, trading around 40 times price to earnings ratio," Tapse said. He pointed out that HAL's order book is valued at approximately ₹ 1.84 lakh crore, marking a significant increase from ₹ 94,129 crore at the beginning of the fiscal year, and it is anticipating the order book to reach ₹ 2.5 lakh crore ( ₹ 2.5 trillion) by the end of FY26. "I believe HAL has a pivotal role to play in India's defence sector and its alignment with the nation's push for self-reliance in defence manufacturing. With multi-year revenue, visibility makes HAL more promising and a proxy stock for the defence sector with a core compounder candidate in the sector," said Tapse. Kunal Kamble, Senior Technical Research Analyst at Bonanza, is bullish on Unimech Aerospace as the stock has given a breakout from a triple-bottom pattern, indicating a potential trend reversal to the upside. Kamble pointed out that the breakout is supported by rising volumes on buying days, reflecting strong buying interest. The stock is trading above its major EMAs, confirming bullish momentum. Additionally, DI+ is above DI-, and the ADX is above DI-, suggesting both an uptrend and strength behind the move. "As long as the stock sustains above ₹ 990, it is expected to move towards ₹ 1,330, with a further upside potential to ₹ 1,450 in the short to medium term," said Kamble. Kamble also suggests buying BEML stock, as it has broken out from an ascending triangle pattern on the daily chart with strong volume support, indicating bullish momentum. On the weekly chart, BEML has also broken out of a seven-week consolidation, reflecting sustained buying interest. The RSI is moving higher, supporting the price action, while the stock trades above all major EMAs, confirming a strong uptrend. "As long as BEML holds above ₹ 3,150, the structure remains positive. The stock appears poised to move towards ₹ 4,550, with a further upside potential to ₹ 5,000 in the near to medium term," said Kamble. Read all market-related news here Read more stories by Nishant Kumar
Economic Times
13-05-2025
- Business
- Economic Times
Ideaforge shares slip 3% after 3-day rally on India-Pakistan military escalation
The stock had climbed steadily since Wednesday, when India launched strikes on nine terror sites in Pakistan in retaliation for a deadly attack in Kashmir that killed 26 people. Ideaforge Technology shares experienced a dip following a 37% surge driven by heightened India-Pakistan tensions, as investors cashed in on profits. Despite easing hostilities, the stock's rally, fueled by increased defence spending expectations, showed signs of overbought conditions. While a near-term pullback is anticipated, brokerages remain optimistic about Indian defence stocks due to favourable geopolitical factors and export potential. Tired of too many ads? Remove Ads Technical indicators point to pullback Tired of too many ads? Remove Ads Shares of Ideaforge Technology fell as much as 3% to Rs 476.60 on the BSE on Tuesday, as investors booked profits following a sharp 37% rally over the past three sessions, spurred by a surge in defence stocks amid military escalation between India and stock had climbed steadily since Wednesday, when India launched strikes on nine terror sites in Pakistan in retaliation for a deadly attack in Kashmir that killed 26 people. The border conflict marked the most severe confrontation between the two nations in nearly three decades, sparking a rally across defence-related stocks, including Monday, shares of Ideaforge jumped as much as 7.9% intraday to Rs 500 despite reports of a pause in hostilities. The rally was bolstered by broader market bets on defence spending and surveillance technology in light of the military officials had reportedly sent a "hotline message" to Pakistan on Sunday, warning of further retaliation if ceasefire violations continued. However, with tensions showing signs of easing, traders appeared to lock in gains on the last week alone, Ideaforge shares gained 25.76%. The stock is up 19.7% in the past three months but remains down 19.8% over the last six signals indicated the stock was in overbought territory, with a 14-day Relative Strength Index (RSI) of 74.1—above the 70 threshold typically seen as a sign of overheating. It was also trading below its 150-day and 200-day simple moving averages, suggesting a near-term pullback was brokerage Ashika Institutional Equity said it remains bullish on Indian defence stocks, citing 'a favourable backdrop of heightened geopolitical activity , expanding order books, and growing export potential. Ideaforge Technology is a leading Indian manufacturer of Unmanned Aircraft Systems (UAS), offering UAVs for mapping, surveillance, and security applications across sectors such as mining and infrastructure. The company has the largest operational deployment of indigenous UAVs in India, with one Ideaforge-manufactured drone reportedly taking off every five company's fully in-house capabilities allow it to design, engineer, and manufacture UAVs with tight control over performance and reliability. It was also an early pioneer in the country's drone space, having developed vertical take-off and landing (VTOL) UAVs as far back as 2009.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Time of India
13-05-2025
- Business
- Time of India
Ideaforge shares slip 3% after 3-day rally on India-Pakistan military escalation
Shares of Ideaforge Technology fell as much as 3% to Rs 476.60 on the BSE on Tuesday, as investors booked profits following a sharp 37% rally over the past three sessions, spurred by a surge in defence stocks amid military escalation between India and Pakistan. The stock had climbed steadily since Wednesday, when India launched strikes on nine terror sites in Pakistan in retaliation for a deadly attack in Kashmir that killed 26 people. The border conflict marked the most severe confrontation between the two nations in nearly three decades, sparking a rally across defence-related stocks, including Ideaforge. On Monday, shares of Ideaforge jumped as much as 7.9% intraday to Rs 500 despite reports of a pause in hostilities. The rally was bolstered by broader market bets on defence spending and surveillance technology in light of the conflict. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Indian military officials had reportedly sent a "hotline message" to Pakistan on Sunday, warning of further retaliation if ceasefire violations continued. However, with tensions showing signs of easing, traders appeared to lock in gains on Tuesday. Technical indicators point to pullback Live Events In the last week alone, Ideaforge shares gained 25.76%. The stock is up 19.7% in the past three months but remains down 19.8% over the last six months. Technical signals indicated the stock was in overbought territory, with a 14-day Relative Strength Index (RSI) of 74.1—above the 70 threshold typically seen as a sign of overheating. It was also trading below its 150-day and 200-day simple moving averages, suggesting a near-term pullback was likely. Meanwhile, brokerage Ashika Institutional Equity said it remains bullish on Indian defence stocks, citing 'a favourable backdrop of heightened geopolitical activity , expanding order books, and growing export potential. Ideaforge Technology is a leading Indian manufacturer of Unmanned Aircraft Systems (UAS), offering UAVs for mapping, surveillance, and security applications across sectors such as mining and infrastructure. The company has the largest operational deployment of indigenous UAVs in India, with one Ideaforge-manufactured drone reportedly taking off every five minutes. Also read | Defence stocks set to rally on export hopes amid rising India-Pakistan tensions: Ashika Equity The company's fully in-house capabilities allow it to design, engineer, and manufacture UAVs with tight control over performance and reliability. It was also an early pioneer in the country's drone space, having developed vertical take-off and landing (VTOL) UAVs as far back as 2009.
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Business Standard
09-05-2025
- Business
- Business Standard
Smallcap defence stock zooms 29% in 2 days despite Q4 loss
Share price of Ideaforge Technology today Shares of Ideaforge Technology moved higher by 20 per cent to ₹463.20 on the BSE in Friday's intra-day trade, extending its previous day's rally, in an otherwise weak market. In the past two trading days, the stock price of this smallcap defence company has zoomed 29 per cent from ₹358.85 on Wednesday. It recovered 54 per cent from its 52-week low of ₹301 touched on April 7, 2025. The stock had hit a 52-week high of ₹864.10 on July 12, 2024. At 01:45 PM; Ideaforge Technology shares was trading 18 per cent higher at ₹456.75, as compared to 1.2 per cent decline in the BSE Sensex. The average trading volumes at the counter jumped over 10-fold. A combined nearly 11 million equity shares changed hands on the NSE and BSE. Catch Stock Market LIVE Updates Today Posted Rs 25.7 crore loss in Q4 Ideaforge Technology reported a net loss of ₹25.7 crore for the quarter ended March 2025 (Q4FY25), due to sharp decline in revenue. The company had posted a net profit of ₹10.3 crore in the year ago quarter. Revenue during the quarter under review dropped 80 per cent to ₹20.3 crore from ₹102.3 crore in Q4FY24, due to a shift in order timelines and delayed government spending. The company reported earnings before interest, tax, depreciation, and amortisation (Ebitda) loss of ₹17.41 crore against profit of ₹20.25 crore. Management commentary FY25 saw a substantial slowdown for the broader drone industry in India, owing to the general elections in the first part and then the slow progress towards procurement initiatives, despite the latent demand. The industry started to regain momentum at the end of the year with the new emergency procurement cycle for Counter Insurgency Counter Terrorism (CICT) operations going into tendering phase in Q4, along with trials of many other civil programs as well towards the end of the same quarter. And thus, while the management did not see closure of opportunities to orderbook in Q4, they now see their healthy progression to the company's L1 pipeline. ALSO READ | With the augmentation of new categories and greater focus on the global markets, the management said the company is seeing increasing momentum towards international opportunities and partnerships. The company intends to substantially increase the market opportunity for Indian drones globally and firmly establish them as a default part of the security, safety, and governance infrastructure of any country, city, or enterprise. Government defence capex The government's defense capex budget has clocked an 8 per cent compounded annual growth rate (CAGR) over FY20-25 and is budgeted to post 13 per cent YoY growth in FY26 to ₹1.8 trillion. This budget is required to fund DPSUs, private defense companies, and import requirements. Potentially, a 10 per cent CAGR in defense capex is expected over the next seven years, and much higher growth is anticipated for defense PSUs over FY25-32. This can be manageable if India's net defense import bill comes down due to increased indigenization and higher exports. However, Motilal Oswal Financial Services believes that if the government agrees to 2-3 bigger deals with other countries, then it will be required to increase the defense capex budget at a much higher rate to meet both domestic PSU growth and immediate requirements via imports. This would depend on several factors, such as the urgency to upgrade the fleet and managing the fiscal deficit, the brokerage firm said in the Hindustan Aeronautics (HAL) company update. ALSO READ | About Ideaforge Technology Ideaforge Technology is the pioneer and the pre-eminent market leader in the Indian unmanned aircraft systems (UAS). The company is backed by leading investors including - Qualcomm, Infosys, Florintree, and other marquee institutional investors. It was ranked 3rd globally in 2024 as a top dual-use (civil & military) drone manufacturer by Drone Industry Insights, the world's leading drone market research and analytics company. Ideaforge has the largest operational deployment of indigenous UAVs across India, with an Ideaforge-manufactured drone taking off every three minutes for surveillance and mapping applications. Ideaforge customers have completed over 650,000+ flights using ideaForge UAVs.
