2 defence stocks to buy now; prefers these 2 PSBs before largecap private banks: Chakri Lokapriya

Chakri Lokapriya, Chief Investment Officer (CIO) for Equities at LGT Wealth India , says most defence stocks have corrected 40-50%. In Europe, NATO is in a flux and with Trump threatening to pull out, major European powers are increasing their defence Budget. This should help the exporting Indian defence companies and Lokapriya is ready to buy Bharat Electronics (BEL) and Hindustan Aeronautics Ltd (HAL).
Lokapriya also says among banks, he would go first into the PSU banks, SBI, Canara Bank and then into large private banks like ICICI and Axis.

What is your take on the defence pack because we are seeing a lot of these stocks participating and globally we are getting to hear that European markets are definitely looking to up their game with respect to defence spending. Within the Indian markets, some of these companies have exposure to the European markets, a case in point being BEL, which is one of the top gainers. After the correction, are you spotting any opportunities there?
Chakri Lokapriya: Basically the defence stocks have all corrected a good 40-50% on the back of lower Indian government spending and there was some amount of re-rating downwards of earnings expectations for the stocks. Fast forward to a few months later, the world is a slightly different place with NATO itself is in a major flux and that is leading to a number of individual European countries increasing their percentage of GDP budget on defence, the UK is a case in point and that will be followed by other countries.

Now, that is good news