GRSE, Mazagon Dock, other defence stocks soar up to 19% as sector extends 1 month gains to over 14%

As markets extended their winning streak for the third consecutive day on Wednesday, defence stocks attracted strong investor interest, with gains of up to 19%. Garden Reach Shipbuilders & Engineers led the rally, followed by Ideaforge Technology, Mazagon Dock Shipbuilders, Bharat Dynamics, and Cochin Shipyard, which saw gains ranging from 8% to 14%.

There were no losers in the 16-stock Nifty India Defence Index which was 5% higher today.

The other gainers included Mishra Dhatu Nigam, Data Patterns (India), Paras Defence and Space Technologies, DCX Systems, Hindustan Aeronautics (HAL), MTAR Technologies, Dynamatic Technologies, Astra Microwave, Zen Technologies Products, Bharat Electronics (BEL) and Solar Industries which were up between 8% and 2%.

It was the best-performing sector for the day as most sectors traded in the green with the exception of IT and FMCG stocks.

GRSE shares rocket returns

Stock of Garden Reach Shipbuilders has been a multibagger returning 115% in the past one year. The share prices have gained on government’s strong focus on defence companies while quarter results have backed the rally. The revenue jumped 34% YoY to Rs 1,343.1 crore in the December quarter. Its double-digit earnings growth was superior to Nifty’s 4% YoY gains.

The defence sector has made a smart recovery in the past one month gaining 14% and could likely end the financial year as the best-performing sector.

Also Read: FY25 hits & misses: Media, PSU bank shares slip in double digits while defence, financial services shine

Setbacks
From October onwards, defence stocks witnessed strong selling pressure as valuation concerns weighed on investors’ minds. Notwithstanding its great run over the last one month, the index returns are at negative 26% with the highest fall witnessed in Ideaforge and DCX and Data Patterns at 44%, 31%, and 30% respectively.

Expert Recommendations
Gautam Shah of Goldilocks Premium Research said that all the positives of the next five years were in the price in case of defence and railway stocks, opining that defence could selectively do well. “There are some marquee top two or three companies that can still stand out,” he said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)