India Playbook 2024 – the India defence equity market story
geopolitical risk globally which is leading to higher defense budgets b) Indian government policy of “AtmaNirbhar” or depending on self for ones’ requirement and hence domestic manufacturers getting a higher market share in the Country’s capex spent c) The companies now have strong longer term Order books, a good return ratios and promising profit outlook.
How has India fared against its global peers?
The equity markets world over have been very strong and polarized with the best performing market being Nikkei (Japan) up 16% in just ~75 days in 2024 and MSCI China down 2% a huge differential of 18% for the investor. The Indian market despite being expensive on a relative market seems to be going from strength to strength, with MSCI India up 6%, in line with MSCI World. The mid and smaller cap indices have started showing clinks in their armor, especially small cap which is flat CYTD underperforming the broader indices. This could be largely due to the stupendous performance of 54% in the last year for small cap and 6-0% for midcaps and profit booking.
Note:
1. Simple average is calculated for the above stocks in Defence
2. Note: The calculated Alpha is the difference between BSE500 & Simple Avg
(Source- Bloomberg)
The India defence equity market story The Interim Budget for 2024 underscores the government's sustained commitment to enhance its defence capabilities. The allocation for the defence capital expenditure outlay has surged significantly, increasing from ~Rs800bn (in FY2014) to Rs1.72 trillion (in
