Defence stocks are in focus as global brokerage firm JPMorgan initiated coverage of three defence stocks, Hindustan Aeronautics, Bharat Electronics, and Mazagon Dock Shipyard. It cited the recent price correction as an opportunity. The brokerage has put an “Overweight” rating with a target price of Rs 340 on BEL while the target price for HAL or Hindustan Aeronautics is Rs 5135 a share. It has initiated coverage on Mazagon Dock Shipbuilders with a “Neutral” rating and a target price of Rs 4,248.
The brokerage firm said that it sees a long runway of structural growth in BEL, making it a preferred pick. Along with strong growth in defence production and exports.
HAL, Mazgaon Dock, BEL down over 15% from 52-week highs
Shares of HAL have fallen 24.39% from their 52-week high of Rs 5,675, which it touched on July 09. The stock of HAL has risen 7.9% in the past five trading sessions. It has delivered a return of 3.4% in the last one month. However, it has fallen 16.6% in the last six months. The stock has given a return of 52% from year to date.
Mazagon Dock shares are off 28.73% from a 52-week high of Rs 5,859.95, which it touched on July 05. The stock has risen a bit over 10% in the last five trading sessions. It has given a return of 5.6% in the past one month. However, it has fallen almost 15% in the last six months. The stock has delivered a return of more than 55% from year to date.
While those of BEL are down 16.4% from a recent high of Rs 340.50, which it touched on July 10. The stock has risen 10% in the last five trading days. It has increased by 11% in the last one month and 1.8% in the past six months. The stock has given a return of 62% from year to date.
Boost to India’s defence MRO capabilities
These stocks have been in focus as India’s maintenance, repair, and overhaul (MRO) capabilities for the defence sector got a boost after Boeing joined hands with AI Engineering Services to enhance these capabilities. The partnership between the two, Financialexpress.com reported earlier, is seen as a key step in establishing industry-leading MRO standards in India.
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