InCred Equities has selected Hindustan Aeronautics Ltd (HAL), Bharat Electronics Ltd (BEL) and Data Patterns (India) Ltd as its preferred bets from the defence sector. The brokerage, in its report released on Thursday, said, “With increasing indigenization and favourable government policies, defence sector will continue to flourish. We maintain our overweight stance. Our preferred stocks in the sector are HAL, BEL, and Data Patterns.”
It noted that the simplification of licensing processes has played a crucial role, leading to a more than 200 per cent jump in defence licenses in the last 6-7 years. This has resulted in significant growth in private sector participation, the brokerage added.
InCred also mentioned that India’s defence products are increasingly competitive on the global stage, with exports reaching 106 countries.
“To foster deep tech innovation, the United States and India have joined forces to launch joint challenges for startups. This initiative, announced in June 2023, underscores the US’ belief in India’s immense potential in deep tech and its willingness to collaborate closely with Indian startups. Other nations, including France, Sweden, and Israel, have also expressed keen interest in collaborating with India’s deep tech ecosystem,” it further stated.
“A big push to indigenisation is expected as Defence Acquisition Council (DAC) is scheduled to meet today to discuss projects worth Rs 2 lakh crore. This includes additional orders for LCA Mk1A, Upgrade of Su30MKI and IAC-II,” InCred underscored.
All the three mentioned defence stocks (HAL, BEL and Data Patterns) settled higher today. HAL rose 1.65 per cent to settle at Rs 2,382.30. BEL jumped 3.48 per cent to close at Rs 145.90. And, Data Patterns shares moved 1.96 per cent higher to end at Rs 2,010.05.
Meanwhile, domestic equity benchmarks continued their upward move for the third straight session. The 30-share BSE Sensex pack rose 87 points or 0.13 per cent to finish the day at 66,988, while the broader NSE Nifty pack moved 37 points or 0.18 per cent up to close at 20,133.