ICICI Securities has highlighted four defence stocks with high return potential, thanks to a healthy order pipeline post-election. The brokerage firm’s top picks are Solar Industries, Astra Microwave, Dynamatic Technologies, and Azad Engineering.
The target prices given by ICICI Securities are:
- Dynamatic Technologies: ₹10,250 (47.5% potential upside)
- Solar Industries: ₹13,250 (12% potential upside)
- Astra Microwave: ₹935 (1.5% potential upside)
- Azad Engineering: ₹1,750 (1% potential upside)
ICICI Securities noted that the defence order pipeline remains strong and companies are expected to see 15-25% revenue growth in FY25 while maintaining margins.
Astra Microwave is expecting production orders for UTTAM radars and awaiting a request for proposal from DRDO for Su-30 radars. Solar Industries is likely to benefit from the upcoming Pinaka order.
Defence stocks have performed exceptionally well since the Modi government launched the ‘Aatmanirbhar Bharat’ campaign. For example, Cochin Shipyard’s shares have increased nearly 9 times, and GRSE’s shares have quadrupled. Azad Engineering’s shares have risen 152% this year, and Solar Industries’ shares have increased by 221% in the last year. Astra Microwave shares have gained 154% in the same period.
The defence sector is expected to continue growing due to the government’s focus on boosting domestic production and exports, making it a long-term investment opportunity.
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