Latest news with #NiftyIndiaDefenceIndex
Time of India
26-05-2025
- Business
- Time of India
65% import to 65% self-reliance: How defence sector turned around with favourable policies, is it time to invest?
Investors' interest in defence stocks has resurged since 7 May 2025, following India's show of military prowess through Operation Sindoor . The Nifty India Defence Index rose over 15%, outpacing the Nifty 50's 1.1% gain. Moreover, 11 of the 18 stocks of the defence sector benchmark gained over 15% during the period. The analysis is based on closing prices between 7 May and 20 May 2025. Strong government support through the Make in India initiative, which encouraged indigenous design, and the development and manufacture of defence equipment , have boosted the performance of the sector. Besides the recent price surge , the performance of the sector has been excellent in the past few years. The defence benchmark gained 97% return in CAGR terms between June 2021 and July 2024. India's defence self-reliance can be gauged by looking at the proportion of equipment manufactured domestically. Currently, India manufactures 65% of defence equipment domestically, a significant shift from the earlier 65-70% import dependency. Other key government initiatives supporting the sector include the Defence Acquisition Procedure, liberalised FDI policy , development of defence corridors in Uttar Pradesh and Tamil Nadu, and simplification of the industrial licensing process. The surge in the defence budget, from Rs.2.53 trillion in 2013-14 to Rs.6.81 trillion in 2025-26, coupled with policy support, private participation and technological innovation, have strengthened the country's military infrastructure. While the defence production reached Rs.1.27 trillion in 2023-24 and grew by 174% since 2014-15, the defence exports expanded 34 times between 2013-14 and 2024-25, according to a March 2025 PIB release. India targets `3 trillion in defence production and Rs.50,000 crore in defence exports by 2029, adds the release. FRONTLINE BETS Long-term drivers Given the dynamic geopolitical and regional scenarios, analysts expect India's defence spending to grow. 'While the nation's defence spending of around 2.3% of GDP is lower than the global defence majors (around 3-5% of GDP), we expect defence capital outlay to grow 7-8% annually over the next five years, potentially translating to $130 billion plus of procurement,' says a Nuvama report released in April 2025. Moreover, there are robust growth opportunities in the shipyards segment. A recent Antique Stock Broking report says that the key big-ticket orders worth Rs.2,120 billion (that includes submarines and naval warships) are likely to be placed during 2025-26 and 2026-27. Such orders will lead to a threefold jump in the order books of the listed defence shipyards over the next two years. Valuations The concerns about overvaluations led to a 38% correction in the defence benchmark between July 2024 and February 2025. The substantial fall in the share prices led to a reduction in premium valuations. The trailing twelve months PE multiple of the Nifty India Defence index fell from 73.4 times in July 2024 to 38 times in February 2025. The current trailing twelve months PE of the benchmark index is at 60 times. Analysts believe that the strong growth opportunities and the government's ambitious targets will lead to a rerating in defence stocks. 'The defence stocks are fairly valued because the capability and competence of the Indian defence products are clearly established and, therefore, defence stocks are set to move higher,' says Dr Manoranjan Sharma, Chief Economist, Infomerics Valuation and Ratings. Moreover, despite the recent surge in the defence companies share prices (after India's counter-terrorism operation), most of the companies share prices are still at a significant discount to their 52-week highs. As of 20 May 2025, 14 out of 18 stocks in the Nifty India Defence Index were trading over 10% below their 52-week highs. March 2025 quarter earnings The sector has reported healthy earnings so far, with 8 out of 18 Nifty India Defence Index companies posting a combined 4.3% year-onyear growth in consolidated net profit, based on data from Reuters-Refinitiv, as of 19 May 2025. Of these, earnings estimates were available for 6 companies, and 5 of them surpassed consensus expectations. Here is how 3 defence companies, out of 8, with decent analyst coverage fared in the March 2025 quarter. Hindustan Aeronautics The government-owned aerospace and defence company reported decent performance in the March 2025 quarter. Both EBITDA and PAT surpassed Reuters Refinitiv estimates by 7% and 10.6% respectively. Its healthy order book of Rs.1.8 trillion provides long term growth visibility. Further, strong future pipeline valued at Rs.1 trillion (for combat aircraft and helicopters) is expected to materialise over the next 1-2 years. While the management has given conservative guidance of 8-10% revenue growth in 2025-26 due to impending changes in certain contracts, analysts expect the company to surpass the guidance. The management aims to invest Rs.14,000-15,000 crore in the next 5 years for expanding its capacities and building operational facilities. A recent Motilal Oswal report reiterates its buy rating but says that it is better to wait for better entry points, as the recent rally was sharp. Data Patterns The vertically integrated defence and aerospace electronics solutions provider reported strong performance in the March 2025 quarter with revenue and EBITDA surpassing Reuters-Refinitiv estimates by 31.9% and 28.5% respectively. The order book at the end of March 2025 stood at Rs.730 crore, which fell 33% year-on-year. The management has retained its revenue guidance of 20-25% for 2025-25 and expects new order wins of more than Rs.1,000 crore in 2025-26. Strong R&D investments, expectations of additional contracts for Brahmos and the focus on expanding the addressable market are the key strongholds. A recent PhillipCapital report says that the new order wins are crucial. Also, a likely increase in order booking in the first half of 2025-26 can improve its valuation. Bharat Electronics The company's revenue and net profit surpassed Reuters-Refinitiv estimates by 2.1% and 20.3% respectively in the March 2025 quarter. The order book of the company stood at Rs.71,650 crore at the end of the March quarter and the management anticipates Rs.26,000 crore of orders in 2025-26. The company's robust infrastructure, focus on R&D, diversification into non-defence businesses, focus on exports, strong margin profile and robust order inflow pipeline are its key strongholds.
News18
21-05-2025
- Business
- News18
Drone Stocks Surge 50% Post Operation Sindoor On Hopes Of Defence Orders; Will The Rally Continue?
Last Updated: Defence and drone manufacturing stocks have witnessed a sharp surge following the launch of Operation Sindoor Drone Stocks Rally: Drone manufacturing and defence-related stocks have witnessed a sharp surge following the launch of Operation Sindoor, India's military response to the April 22 terrorist attack in Pahalgam. Since May 7, shares of key players such as IdeaForge Technology, Paras Defence, Zen Technologies, Hindustan Aeronautics (HAL), Bharat Electronics (BEL) and DCM Shriram Industries have gained between 8% and 50%. The rally has been driven by expectations of increased government spending on defence technology, particularly unmanned aerial systems. India's defence ecosystem has matured significantly in recent years, underscored by enhanced integration of indigenous technologies in drone warfare, electronic warfare, and layered air defence systems. The precision and preparedness displayed during recent border escalations have earned international recognition, reinforcing investor confidence in India's defence manufacturing capabilities. 'With greater operational sophistication and reliable indigenous production, Indian defence companies are well-positioned for sustained growth," analysts said. The prevailing sentiment reflects confidence in a new strategic doctrine—swift, technology-led retaliation in response to acts of terrorism. While defence stocks have rallied significantly, several analysts believe valuations are now approaching fair levels. 'India's leading defence names are likely to continue performing well, but future upside depends on several variables including order visibility and budgetary priorities," said Manoranjan Sharma, Chief Economist at Infomerics Valuation and Ratings. Ambareesh Baliga, a Mumbai-based independent analyst, expects momentum in drone-related stocks to continue, with potential gains of another 15-20% in the short term. Long-Term Demand Drivers Operation Sindoor demonstrated the increasing use of drones in both surveillance and combat. Market expectations are building around a sustained push for drone procurement by the Indian military. According to Grand View Research, India's military drone market, valued at $1.53 billion in 2024, is projected to reach $4.08 billion by 2030, growing at a CAGR of 17.9%. What Should Investors Do Now? Despite strong growth prospects, analysts and fund managers are urging investors to remain cautious. 'Drone stocks have seen a rapid run-up, and much of the anticipated government spending is already factored into current prices," said Ashwini Shami, EVP & Portfolio Manager at OmniScience Capital. 'Valuations are now stretched, with many trading at high P/E multiples." Shami prefers public-sector defence firms like HAL and BEL, citing stronger order visibility, wider moats, and more reasonable valuations compared to smaller private peers. The Nifty India Defence Index has rallied 17.9% and 15.4% since the Pahalgam attack and Operation Sindoor, respectively. In contrast, the benchmark Nifty 50 has risen only 2.1% and 1.1% in the same periods. Disclaimer:Disclaimer: The views and investment tips by experts in this report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions. First Published: May 21, 2025, 11:21 IST
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.
Time of India
21-05-2025
- Business
- Time of India
Will drone stocks continue to soar after recent military conflict?
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 , Bharat Electronics , Paras Defence and Space Technologies , 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 AMC. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Cara Membantu Orang Terkasih Menghadapi Limfoma Limfoma Pelajari Undo 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. Ambareesh Baliga, a Mumbai-based independent analyst, said the momentum is strong in drone stocks and can move 15-20% higher from the current levels. In 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 said. Live Events Agencies Albeit 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 Capital. Shami said the outlook from a valuation perspective is not exciting any more since drone stocks are trading in a high P/E range. PSU 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
20-05-2025
- Business
- Mint
Paras Defence share price falls over 5% after three promoters sell stakes via bulk deals. Do you own?
Paras Defence share price fell as much as 5 per cent in Tuesday's trading session after promoters were seen trimming stakes in the defence manufacturer via bulk deals on Monday. At 9:50 am, Paras Defence stock touched an intraday low to ₹ 1,620.50 on National Stock Exchange (NSE) on May 20. On Monday, three promoters of Paras Defence & Space Technologies Ltd. — Sharad Virji Shah, Anish Hemant Mehta, and Kaajal Harsh Bhansali — offloaded a portion of their holdings through block deals. As per available data, Sharad Virji Shah sold 9 lakh shares at ₹ 1,682.87 each, while Anish Mehta and Kaajal Bhansali each sold 2.17 lakh shares at ₹ 1,664.62 per share. The promoters of the company collectively sold 13.34 lakh shares, which represents 5.8% of their total holdings and 3.3% of the company's total outstanding shares. As of the March quarter, the promoters of Paras Defence held a 57.05% stake in the company. Within this, Sharad Shah owned 18.05%, while both Anish Mehta and Kaajal Bhansali each held a 3.53% stake. The defence manufacturer launched its IPO in September 2021 at an issue price of ₹ 175 per share. On Monday, the stock closed at ₹ 1,707.70, after reaching an all-time high of ₹ 1,943.60 during the day. Indian defence stocks have recently drawn significant attention, especially after Operation Sindoor showcased the country's robust domestic defence manufacturing capabilities. 'The Nifty India Defence Index has surged over 50% since February 2025, recovering from a previous 33% correction, with a 9% gain in May alone. Despite the broad rally, only six stocks have surpassed their previous highs, while others remain below peak levels. The sector is seen as a promising long-term opportunity, backed by rising defence budgets, growing export interest, and sustained policy focus under the Make in India and Atmanirbhar Bharat initiatives,' said Siddharth Bhamre - Head of Research, Asit C Mehta Investment Intermediates Ltd.
