Defence shares of Bharat Forge, BEL, Mazagon Dock recover losses made on June 4

NSE

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Stocks June 3 (close) Today’s price Recovery Bharat Forge ₹ 1,608.25 ₹ 1,735 +8% HAL ₹ 5,273.65 ₹ 5,249.90 -0.5% BEL ₹ 318.65 ₹ 309.45 -3% Cochin Shipyard ₹ 2,013 ₹ 2,086 +3.6% Bharat Dynamics ₹ 1,596.50 ₹ 1,545.95 -3% Data Patterns ₹ 2,974.15 ₹ 2,944.90 -1% Paras Defence ₹ 928.05 ₹ 1,156.90 +25% Mazagon Dock ₹ 3,257.60 ₹ 3,880 +19%

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Shares of defence-linked companies zoomed in Friday’s (June 14) trade as investors continue to reaffirm their faith after these stocks declined as much as 21% on June 4, the day of the Lok Sabha election results.Most defense stocks, including Paras Defence and Space Technologies, Bharat Electronics, Bharat Forge, Mazagaon Dock Shipbuilders, and Cochin Shipyard, have recovered up to 25%, compared to their closing levels on June 3.Leading the pack is Paras Defence shares, surging 20% to hit a one-year high of1,156.90. Following closely, shares of Mazagon Dock Shipbuilders, and Cochin Shipyard were up around 15% and 8% each.Among others, Bharat Forge, Bharat Dynamics, and Data Patterns (India) shares also surged in the range of 5-8%, respectively.Siddhartha Khemka of Motilal Oswal said the entire street is looking at this surprise move with awe because there was a very strong rally in some of these names for last couple of quarters and post the election, we saw sharp correction.“Definitely, valuations are something which we cannot discuss. They are astronomical levels. But just on back of the very high expectation of growth, what the new government and the new ministry has come and said that not only the Make in India opportunity, we will now look at defence as a large exports opportunity,” Khemka said.Further, he expects some policy in the likes of PLI schemes for some of these defence names. “So we have already built capabilities. We are building some of these defence equipment’s in technological tie-up with some of the global players, and now looking for exports. So I think it’s a decadal story which will continue to play on for a long time.“Analysts at multiple brokerage firms also said that the defense sector will be one of the key beneficiaries of the BJP’s return to power.“The focus of Modi 3.0 is likely to continue on developing the country’s public infrastructure, such as roads, water, metro, railways, defense, digital infrastructure, and green technologies,” brokerage house Axis Securities noted.According to reports, Union Defence Minister Rajnath Singh has set a target to generate military exports worth50,000 crore in the next five years.Going ahead, Singh is expected to chair review meetings for major defence production initiatives and flagship schemes designed to promote indigenous research and development.