ICICI Securities has given a target price of Rs 10,250 for Dynamatic Technologies (upside potential of 47.5%), Rs 13,250 for Solar Industries (upside potential of 12%), Rs 935 for Astra Microwave (upside potential of 1.5%) and Rs 1,750 for Azad Engineering (upside potential of 1%).
“We have witnessed an improvement in the defence ordering post the general election. The order pipeline for most of the companies under our coverage remains healthy and managements have guided for 15–25% revenue growth while maintaining the margins for FY25,” said the domestic brokerage firm in its report.
Astra Microwave (AWP) is expecting production orders of UTTAM radars soon for the first series of limited production. 440 UTTAM radars are likely for LCA Mk1, considering additional 97 units that are being discussed. AWP is awaiting an RFP from DRDO for Su-30 radars.
Also read: Fund Manager Talk | Worried about valuations in bull market? Nippon CIO on what to buyICICI Securities also stated that it still awaits the Pinaka order, which is in advanced stages and is likely to benefit Solar Industries. The order status will be updated in the next 3-6 months.Defence stocks have been having a dream run ever since the Modi government started the ‘Aatmanirbhar Bharat’ campaign. The returns in the sector are mouth-watering in a one-year time frame. The shares of Cochin Shipyard is up nearly 9 times, GRSE 4 times while most other defence counters have at least doubled money.
Even among ICICI Securities’ preferred picks, Azad Engineering has also given multibagger returns of 152% in the current calendar year alone, while Solar Industries shares have also increased by 221% in the last one year. Astra Microwave shares are also standing on gains of 154% in the last one year.
Given the twin growth engines of the government’s unrelenting focus to enhance domestic production capabilities and push for exports, the defence sector is being seen as a multi-year story.
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