The Indian defence and aerospace sector is currently experiencing a surge in order inflows, both from the domestic market and through increased export demands. According to Harshit Kapadia, Vice President at Elara Capital, this trend bodes well for India's economic prospects and presents exciting opportunities for investors. Kapadia's positive outlook is centered around specific companies within the public sector undertaking (PSU) segment as well as private sector, each with its own unique growth story.
One of the companies on Kapadia's radar is
Hindustan Aeronautics Ltd (HAL), which has witnessed a substantial increase in its stock price. While HAL's export share has traditionally been modest, the company is primed for a significant uptick. The current global landscape presents India with a rising opportunity to expand its export portfolio, encompassing helicopters and fighter jets.
HAL has already taken steps in this direction by signing a Memorandum of Understanding (MoU) with Argentina for helicopter exports, which is just the beginning. He expects more such strategic moves in the near future, making HAL a prime beneficiary.
Both companies play crucial roles in India's defence infrastructure, and their growth prospects look promising amidst the increasing order inflow.
Data Patterns, originally a component manufacturer, is now striving to become a prominent system integrator in the radar and electronics space. Their long-term vision includes venturing into satellite manufacturing for defence applications. These ambitious plans are expected to significantly boost their revenue, with anticipated earnings growth of 40-50 percent over the long term. The company's strong order inflow momentum contributes to its bright outlook.
Astra Microwave Products, a private company, is another bright spot in the Indian defence and aerospace sector. With a focus on defence and aerospace, Astra Microwave Products is riding the wave of increasing order inflows, contributing to its promising growth potential.
PTC Industries is catching Kapadia's attention as a private sector player with significant growth potential. While the specifics of their strategy weren't detailed, their inclusion on this list signals their potential in the evolving landscape of the Indian defence and aerospace sector.
Mishra Dhatu Nigam Ltd’s (MIDHANI) role as a raw material supplier to the defence and space industry is vital. The company has contributed materials for projects like
Chandrayaan-3, supporting the nation's ambitions in space exploration. This strategic position makes MIDHANI an attractive investment option in the sector.
MTAR Technologies stands out in the defence and aerospace sector due to its substantial presence. Kapadia highlighted the company's growing order inflow momentum as a key indicator of its future success. Furthermore, MTAR's involvement in the green hydrogen space adds an extra layer of potential growth.
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(Edited by : C H Unnirkishnan)
First Published: Aug 25, 2023 11:59 AM IST