After the Ministry of Defense (MoD) cleared several orders in the final week of FY23, leading defense companies like Bharat Electronics, Bharat Dynamics, and Garden Reach Shipbuilders & Engineers like PSU saw their shares rise by more than 6% in intraday trade on Friday. Shipyards in Cochin and Goa
Portions of Bharat Hardware (BEL) exchanged higher by 6.42 percent. Bharat Dynamics (BDL) traded 3.22 percent higher at 97.36 on the BSE. 985.90.
Mazagon Dock Shipbuilders Ltd. and Garden Reach Shipbuilders & Engineers both gained 2.73 percent. In contrast, at 12:54 p.m., the S&P BSE Sensex was up 1.43 percent to 58,787.93.
On Thursday, the Ministry of Defense (MoD) concluded a number of equipment contracts worth 35,000 crore with Indian shipyards Bharat Dynamics, Bharat Electronics, and BrahMos Aerospace.
In keeping with the government’s emphasis on indigenization, domestic brokerage ICICI Securities stated that the majority of these orders fall under the Indian-IDMM category. As a result, the brokerage anticipates gains for companies in BEL and data patterns, such as radar, instrumentation, and surveillance systems, that are downstream. BDL, BEL, and Shipyard’s long-awaited backlog is covered by the order.
The brokerage has maintained its “Buy” rating and target price for BEL, which it considers to be its top pick in the defense industry. 125. BEL will likely benefit the most from the MoD’s current order placement, followed by BDL. In the case of BEL, in addition to the direct award of orders totaling 11,830 crore, AWS, NGOPV, and NGMV may present additional opportunities.
The brokerage has revised its target price from 955 to 1,175 on DCF valuation in light of BDL’s improved earnings outlook. The brokerage has also changed BDL’s recommendation from “Add” to “Buy.”
Data Pattern, the Cochin Shipyard, and the Goa Shipyard are “Not Rated.”