Price-to-Earnings ratio (P/E) is a common way to check if a stock is fairly valued. It shows how much investors are willing to pay for every rupee of a company’s earnings. A lower P/E compared to the industry average can mean the stock is undervalued or has strong earnings.
In the defence sector, some financially strong companies are trading at P/E levels below the industry P/E. This makes them attractive for investors looking for value and stability. Such stocks can offer growth opportunities while being supported by India’s rising defence investments and long-term government focus on self-reliance.
Here are a few financially strong Defence Stocks with PE less than their Industry average
Bharat Electronics Limited
With a market capitalization of Rs. 300,578.11 crore, the shares of Bharat Electronics Limited closed at Rs. 411.20 per equity share Bharat Electronics Limited trades at a price-to-earnings ratio of 54.7, significantly below the industry average of 75.2, indicating potential undervaluation compared to peers in its sector. In terms of return ratios, the company’s ROCE and ROE stand at 38.9 percent and 29.2 percent, respectively.
Bharat Electronics Limited (BEL) was established in 1954 under the Ministry of Defence, Government of India. It primarily manufactures advanced electronic products for the Indian Armed Forces, including radar systems, communication equipment, electronic warfare, and avionics. BEL also serves civilian sectors with diverse technology solutions.
Data Patterns (India) Ltd
With a market capitalization of Rs. 15,933.88 crore, the shares of Data Patterns (India) Limited closed at Rs. 2,846.15 per equity share Data Patterns (India) Limited trades at a price-to-earnings ratio of 74.6, significantly below the industry average of 75.2, indicating potential undervaluation compared to peers in its sector. In terms of return ratios, the company’s ROCE and ROE stand at 21 percent and 15.2 percent, respectively.
Data Patterns (India) Limited was established in 1985 and designs and manufactures high-reliability electronic systems for defense and aerospace. It provides radars, electronic warfare, communication systems, and rugged displays, focusing on indigenously developed technology for air, land, sea, and space defense platforms.
Garden Reach Shipbuilders & Engineers Limited
With a market capitalization of Rs. 29,978.26 crore, the shares of Garden Reach Shipbuilders & Engineers Limited closed at Rs. 2,617 per equity share Garden Reach Shipbuilders & Engineers Limited trades at a price-to-earnings ratio of 53.9, significantly below the industry average of 75.2, indicating potential undervaluation compared to peers in its sector. In terms of return ratios, the company’s ROCE and ROE stand at 36.6 percent and 27.6 percent, respectively.
Garden Reach Shipbuilders & Engineers Limited (GRSE) was established in 1884 in Kolkata. It is a premier Indian shipbuilding company under the Ministry of Defence, specializing in designing and building warships, naval vessels, and maritime engineering products for the Indian Navy, Coast Guard, and exports.
Astra Microwave Products Limited
With a market capitalization of Rs. 10,443.95 crore, the shares of Astra Microwave Products Limited closed at Rs. 1,100 per equity share Astra Microwave Products Limited trades at a price-to-earnings ratio of 64.2, significantly below the industry average of 75.2, indicating potential undervaluation compared to peers in its sector. In terms of return ratios, the company’s ROCE and ROE stand at 18.7 percent and 14.4 percent, respectively.
Astra Microwave Products Limited was established in 1991 and is based in Hyderabad. It designs and manufactures high-tech radio frequency (RF) and microwave components, modules, and subsystems. The company serves defence, space, meteorology, and telecommunications sectors with advanced technological solutions.
Zen Technologies Limited
With a market capitalization of Rs. 14,338.11 crore, the shares of Zen Technologies Limited closed at Rs. 1,588 per equity share Zen Technologies Limited trades at a price-to-earnings ratio of 57.2, significantly below the industry average of 75.2, indicating potential undervaluation compared to peers in its sector. In terms of return ratios, the company’s ROCE and ROE stand at 37.2 percent and 26.1 percent, respectively.
Zen Technologies Limited was founded in 1993 and is based in Hyderabad. The company designs and manufactures advanced defense training simulators and counter-drone solutions. It provides live, virtual, and constructive training systems to defense and security forces globally, focusing on indigenous technology and strong R&D capabilities.
Written By – Nikhil Naik
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
