In the recent past, a huge decline has been seen in defense stocks. If an average is taken, most defense stocks have fallen 30 percent from their high. What should investors do next? Will the decline in defense sector stocks increase or will the boom return? Which defense stocks should be bought at these levels? Let us know the answers to all the questions.
30% down from high
Cochin Ship – 44%
Bharat Dynamics – 40%
Garden Reach – 40%
MTAR Tech – 40%
Apollo Micro – 36%
BEML – 35%
Paras Defence – 33%
Mazagon Dock – 32%
Dhaka -31%
Ideaforge – 31%
HAL -26%
DCX Systems: 25%
BEL – 20%
Astra Micro – 17%
(till September 19)
What will happen next?
This entire list includes government as well as private defense stocks, which have come down from 44% to 17 percent. What should investors do next? For this, Business Today Bazaar spoke to Prashant Tapase, Senior Research Analyst, Mehta Equities Ltd. He says that due to the bull run in defense stocks in the last 1 to 2 years, valuations became high, due to which there is a correction in the stocks. Now after the decline, select stocks are looking attractive, but investors should wait for the results of Q2, which will show a better and clear picture. If the margin and growth in Q2 remain intact like the numbers of Q1, then it is fine, otherwise there may be selling pressure in these stocks in the second round. The long term growth outlook remains intact, but a little caution should be exercised in the short term.
On technical basis, 3 stocks can be bought from long term perspective.
1. Cochin Shipyard Ltd
Buying range: Rs 1650-1720 per share
2. MIDHANI (Mishra Dhatu Nigam Limited)
Buying range: Rs 380-390 per share
3. HAL (Hindustan Aeronautics Limited)
Buying range: Rs 4100-4200 per share
Disclaimer: We do not recommend investing in any stock. Please consult SEBI advisor before investing.