In the second half of 2023, Foreign Portfolio Investors (FPIs) infused close to $8 billion into the Indian equity market, with significant buying in the secondary markets in November and net selling in September.
India’s Aerospace & Defense Market size was over USD 10 billion in 2016 and is predicted to grow at an estimated CAGR of over 5 percent from 2017 to 2024 and India’s defence budget was worth $74 billion in 2023 which is expected to achieve a CAGR of more than 4 percent during the Financial year 2024-2028.
Here are some of the defence stocks in which Foreign Institutional Investors/Foreign Portfolio Investors have increased their holding stake in Q3FY24
MTAR Technologies
MTAR Technologies Limited is engaged in manufacturing mission-critical precision components, assemblies, sub-assemblies, and spare parts for energy, nuclear, space, aerospace, defence and other engineering industries, to serve projects of high national importance and many more.
The shares of MTAR Technologies Limited were training at Rs. 2,184.40, down 0.75 percent from its previous day’s close price of Rs. 2,200.80 and its market capitalization is Rs. 6,724 Crores.
In Q3FY24, the Foreign Institutional Investors/Foreign Portfolio Investors increased their holding in the company from 4.52 percent to 8.81 percent, by adding a 4.29 percent stake.
It has a strong client base with esteemed clients such as ISRO, NPCIL, DRDO, Bloom Energy, Rafael, Elbit and many more.
As of September 2023, it has an order book of Rs. 997.6 Crores, with its business order book breakup as follows Clean Energy- Fuel Cell, Hydel & Others 58.2 percent, Clean Energy- Civil Nuclear Powe 17.1 percent, Space 13.3 percent, defence 5.1 percent and others 6.3 percent.
Its revenue from operations grew by 78.18 percent from Rs. 322.01 Crores in FY22 to Rs. 573.75 Crores in FY23, accompanied by increasing profits of Rs. 60.87 Crores to Rs. 103.42 Crores.
It has reported a return on equity (ROE) of 17.9 percent and a return on capital employed (ROCE) of 22.2 percent, it is making good returns on its equity and capital employed, with consistent growth in its profitability.
Astra Microwave Products
Astra Microwave Products Limited is engaged in the business of designing, developing and manufacturing sub-systems for radio frequency and microwave systems used in defence, meteorology, space and telecommunications.
The shares of Astra Microwave Products Limited were trading at Rs. 567, down 1.12 percent from its previous day’s close price of Rs. 573.40 and its market capitalization is Rs. 5,378 Crores.
Astra Microwave Products Limited has a healthy order book of Rs. 1,867 Crores, its Business wise order breakup is as follows, Defence/public 69 percent, Space 11 percent, meteorological 3 percent and Exports 17 percent.
It has a strong client base with esteemed clients such as HAL, Larsen & Toubro, ISRO, Bharat Dynamics, Bharat Electronics, Brahmos and many more.
In Q3FY24, the Foreign Institutional Investors/Foreign Portfolio Investors increased their holding in the company from 1.73 percent to 2.94 percent, by adding a 1.21 percent stake.
Its revenue from operations grew 8.67 percent from Rs. 750.46 Crores in FY22 to Rs. 815.52 Crores in FY23, accompanied by increasing profits of Rs. 37.87 Crores to Rs. 69.83 Crores.
It has reported a return on equity (ROE) of 11.4 per cent and a return on capital employed (ROCE) of 17.1 percent, it is making decent returns on equity and good returns on its capital employed.
NIBE
Nibe Limited is engaged in the business of manufacturing critical components for Defence, E-Vehicles, and Software Development.
The shares of Nibe Limited were trading at Rs. 815.95, up 2.78 percent from its previous day’s close price of Rs. 793.85 and its market capitalization is Rs. 1,072 Crores.
In Q3FY24, the Foreign Institutional Investors/Foreign Portfolio Investors increased their holding in the company from 3.88 percent to 9.81 percent, by adding a 5.93 percent stake
The company’s standalone revenue from operations grew 400 percent from Rs. 21 Crores in FY22 to Rs. 105 Crores in FY23, the company has just become profitable in 2023 by earning a profit of Rs. 5 Crores and it has a trailing twelve months profit of Rs. 8 Crores.
It has reported a return on equity (ROE) of 11.8 percent and a return on capital employed (ROCE) of 15.9 percent, it is making decent returns on its equity and capital employed.
Written by: Bharath K.S
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