Stocks to buy: Bharat Electronics, Astra Microwave, Bharat Dynamics among top defence stock picks by ICICI Securities
₹190 billion for 5 fleet support ships was awarded to Hindustan Shipyard, while Acceptance of Necessity (AoN) worth ₹78 billion was accorded for various platforms. Progress is being made on development and acquisition of fighter aircraft along with a visit by Air Chief Marshal to Hindustan Aeronautics Ltd (HAL). Additionally, successful firing of Astra BVR missile from Tejas, progress on P75I and P76 submarine programmes and guided Pinaka Rocket System is likely to enter final user trials in the next 1-2 months, are among key developments in the sector.
ICICI Securities believes the progress on fighter aircraft and integration of indigenous missiles on them is likely to be positive for HAL, Bharat Dynamics (BDL), Bharat Electronics (BEL) and Astra Microwave Products. In particular, it sees benefits for BEL and Astra Microwave Products in the near term. “In our view, continued AoNs, orders and tests even in the pre-election year (General Elections are due in CY24 bode well for the defence sector.
It allays apprehensions of investors pertaining to orderbook accretion," ICICI Securities said in a report. In the sector, BEL, BDL, Astra Microwave and HAL are key picks of the brokerage house. Also Read: Stocks to buy: Lupin, Federal Bank, Ashok Leyland among top midcap stock picks by Axis Securities Let us take a look at top stocks to buy in the defence sector by ICICI Securities.
ICICI Securities has a ‘Buy’ rating on Astra Microwave Products with a target price of ₹425 per share. It expects EV/EBITDA of 15.7x and 12.5x for FY24 and FY25, respectively. Astra Microwave Products last month won orders worth ₹158 crore for supply of Satellite sub-systems, Airborne Radar and sub-systems of Radar and EW projects, to Defence
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