Top 5 Defence Stocks Benefited in 3rd Term of BJP Government

Today’s blog will cover India’s top 5 defense stocks of companies contributing to the Nation’s defense capabilities. The defense sector greatly enhances India's security, which also fosters self-sufficiency in defense manufacturing. India currently possesses the world's second-largest standing army to protect its borders and people, it also faces a dangerous geopolitical environment that calls for robust defense capabilities.

This blog is based on the recent statement made by Defence Minister Shri Rajnath Singh in which he intends to enhance India’s security, become self-sufficient in the defense industry, and ensure the health and safety of active and retired military members.

 

India’s Defence Expenditure

Here is the Defense Budget Breakdown for FY 2024-25 in which total allocation of Rs 6.21 lakh crore (13.04% of the Union Budget) with Capital acquisition costs of Rs 1.72 lakh crore (27.67% of the overall defense budget), Revenue expenditure for Armed Forces (excluding salaries) was set to Rs. 92,088 crore. Pension Allocation is Rs 1.41 lakh crore and Strategic Allocations Border infrastructure strengthening costs Rs 6,500 crore.

All these figures reflect a commitment to strengthening the Indian defense system.

 

 

Top 5 Defence Stocks in India

 

1. Hindustan Aeronautics Ltd (HAL)

Hindustan Aeronautics Ltd (HAL) is a defense and aerospace firm founded on December 23, 1940, in Bangalore, Karnataka, in collaboration with the Government of Mysore. In March 1941, the Government of India became a shareholder in the corporation, and it took over control in 1942. 

This large-cap defense company, which has been around for decades, has the sector's greatest market share at 88.48%. Moreover, the stock's 5-year CAGR is 21.31%. HAL has an industry P/E ratio of 54.46 and an ROE of 26.15%.

It is essential to inform our readers about its percentage of shares. This company has 71.64% reserved for promoters, 12.42% for foreign Institutions, and 6.37% for retail investors.

Readers, please note that HAL noticed a spike of 0.64% in its stock.

 

2. Bharat Dynamics Limited

Bharat Dynamics Limited (BDL), a small-cap firm, develops and produces underwater guided missile systems. It was set up on July 16, 1970. The stock's five-year compound annual growth rate is 16.69 percent. BDL has a P/E ratio of 56.93 and an ROE of 16.85%
This company has 74.93% reserved for promoters, 7.93% for mutual funds, and 9.72% for retail and other investors.

Bharat Dynamics Limited (BDL) shares fell 10%, sparking the lower circuit, with the stock reaching a low for the day of Rs 1,293.35 on Wednesday, June 5, 2024.

 

 

3. Data Patterns (India) Limited

This small-cap firm, Data Patterns(India) Limited, was founded on November 11, 1998, as Indus Teqsite Private Limited. The company is a vertically integrated provider of defense and aerospace electronics solutions to the indigenous defense goods industry. 

The stock has a five-year CAGR of 15.37%. Data Patterns (India) Limited has an industry P/E ratio of  56.93.

Data Patterns (India) Limited has 42.41% reserved for Promoters, 14.57 % for foreign Institutions, 9.34% for mutual funds, for Indian Public 25.38%.

 

4. Bharat Electronics Limited (BEL)

Bharat Electronics Limited (BEL) is a public sector company that specializes in aerospace and defense electronics. It is largely involved in the design, development, manufacture, and distribution of high-end electronic goods and systems. Bharat Electronics Ltd is a Navratna public-sector enterprise under the Ministry of Defense.

On December 13, 2023, the company's market capitalization exceeded Rs.1.18 lakh crore. BEL's share price has risen by more than 324% over the last three years.

Bharat Electronics Limited was established in Bangalore in 1954. In 1956, the firm began developing a small variety of communication devices. It began producing receiving valves in 1961, Germanium semiconductors in 1962, and radio transmitters for All India Radio (AIR) in 1964.

BEL’s P/E ratio is 53.31 and ROE is 23.52%. It has 51.14% reserved for promoters and foreign Institutions- FII 17.56%, Mutual funds 18.06%, Retail and other 8.66%. 

Bharat Electronics Limited (BEL) noticed a spike of 0.64% in its stock.1.49%.

 

 

5. Mazagon Dock Shipbuilders Limited (MDL)

Mazagon Dock Shipbuilders Limited (MDL) is a major shipbuilding firm in India. The company was founded in 1934 and has its headquarters in Mumbai. It owns around 47% of Goa Shipyard Limited, which is located on India's west coast. The Ministry of Defence, Government of India, administers it.

The firm was a modest dry dock, and its first shipyards were built in 1774. Mazagon Dock has built hundreds of vessels, including battleships, submarines, cargo/passenger ships, and offshore platforms, establishing a strong presence in the maritime industry.

Mazagon Dock Shipbuilders Limited has a market capitalization of Rs.46,284 crore as of January 11, 2024. Mazagon Dock's stock price has risen 926.46% in the last three years.

Mazagon Dock Shipbuilders Limited (MDL)’s P/E ratio is 35.3, and ROE is 28.61%. It has reserved 84.83% for promoters, Mutual funds 0.48%, foreign Institutions- FII 2.38%, and 12.12% for Retail and others.

Mazagon Dock Shipbuilders Limited experienced a 4.3% increase. So if you are looking to invest in its stock you can think of it after having words with your Financial advisor.

 

Conclusion

The defense sector shipped goods at a record Rs 21,083 crore during the fiscal year 2023-2024. Recently Defense Minister Shri Rajnath Singh has set an ambitious aim of increasing this amount to more than Rs 50,000 crore by 2028-2029, demonstrating the government's commitment to build India as a global defense leader.

The Indian government's aim for Indigenous defence manufacture by defence stocks in India is expected to increase demand for defense equipment and supplies. As a result, demand for defense shares in India may surge significantly, potentially leading to a spike in stock prices.

Investors can consider investing in Indian defense stocks after completing extensive research and analysis of the company's finances, growth potential, and market conditions.

We trust that this blog has given you insightful knowledge about India's defense industry and leading Indian enterprises. 

 

 

Disclaimer : We do not recommend any type of buying or selling activity through this blog. Always consult your Financial advisor before investing.