Defence companies Mazagon Dock, Hindustan Aeronautics (HAL), and Garden Reach Shipbuilders (GRSE) saw big jumps in their net profits for the June quarter. Now, ICICI Securities has shared its thoughts on whether to buy or sell these stocks.
Mazagon Dock Shipbuilders: Sell | Target Price: ₹1,165 | Downside Potential: 77%
Mazagon Dock’s profit after tax surged 121% year-on-year to ₹696 crore. Despite this, ICICI Securities believes the stock might be overpriced right now. They think that while the company’s margins will stay high until FY27, they could drop when new orders are executed.
The stock could be overvalued at its current price, and there are risks with ordering and execution timelines. Shares of Mazagon Dock were trading flat at ₹4,986 around 1:30 pm on BSE.
Hindustan Aeronautics (HAL): Buy | Target Price: ₹5,170 | Upside Potential: 11%
HAL’s net profit rose by 77% year-on-year. ICICI Securities recommends buying HAL shares, despite some delays caused by supply chain issues and testing problems. They believe HAL’s solid order book and potential new orders will support growth. However, they expect manufacturing to pick up only when certain projects move forward. Shares of HAL were trading 1.6% higher at ₹4,737.75 around 1:30 pm.
Garden Reach Shipbuilders: Sell | Target Price: ₹515 | Downside Potential: 74%
Garden Reach Shipbuilders’ profit increased by 14% year-on-year. Despite impressive growth, ICICI Securities advises selling the stock as they believe the price already reflects most of the company’s potential gains. The company has a large order book and good future prospects, but ICICI Securities thinks returns might be limited. Shares of GRSE were trading 0.7% lower at ₹1,947.75 around 1:30 pm.
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