Defence Stocks For up to 25% Gains: HAL, BEL, Midhani and Astra Microwave; check target prices

The Nifty India Defence Index has registered phenomenal growth in the last 1 year thanks recent surge due to Operation Sindoor. Due to the central government's excessive focus on the Make in India campaign, the Nifty India Defence Index has jumped by over 40 per cent in the 1-year period. 

The Nifty 50 benchmarks, meanwhile, has jumped by 7.91 per cent in the same time frame. The Nifty India Defence Index has registered a growth of 30 per cent. Just in last 3 months, the defence index has surged over 57 per cent. 

Amid such a scenario, brokerage ICICI Direct has picked 4 defence stocks to buy: HAL, BEL, Midhani, and Astra Microwave.

Even as defence stocks have been rising fast, headline indices- BSE Sensex and Nifty 50- have bee trading in positive territory. The BSE Sensex is up by 304.06 points at 82,493.05. On the other hand, Nifty 50 was also up by 88.70 points at 25,091.75.

According to a report by brokerage firm ICICI Direct, the government is planning an emergency purchase of Rs 40,000 crore defence equipment. The target is to increase defence spending to 2.5 per cent of India's GDP by FY30. 

The brokerage says that although valuations are high (average P/E 48x FY27E), value is still visible in select defence stocks.

ICICI Direct has picked a total of 4 defence stocks for investors, including 3 defense PSU stocks. These include Hindustan Aeronautics (HAL), Bharat Electronics (BEL), Midhani and Astra Microwave.

The brokerage has a 'buy' recommendation on the defence PSU stock, Bharat Electronics Limited (BEL). The current price of the largecap defence company's stock is Rs 390.70 and the target price has been set at Rs 430, which is 10 per cent higher.

The brokerage has a 'buy' call on defence PSU stock, Hindustan Aeronautics Limited (HAL). 

The defence largecap company's stock at close on Friday was at Rs 4,987.30 and the target price is set at Rs 6,100, which is an upside of more than 22 per cent.

ICICI Direct has given a 'buy' call on the government defence company Mishra Dhatu Nigam Limited (Midhani). The midcap aerospace and defense company's stock closed trading on Friday at Rs 425.25, while the share price target is Rs 530, which is nearly 25 per cent higher.

The brokerage has given a 'buy' recommendation for the midcap aerospace and defence company, Astra Microwave Products. Its stock closed trading on Friday at Rs 1,132.55. The company has given a target price of Rs 1,270, which is more than 12 per cent.