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The assurance of Prime Minister Narendra Modi today to provide a favourable business environment to the domestic and foreign companies in the Defence sector had an electrifying impact on the shares of companies catering to the Defence sector.
What seems to have worked in favour of these stocks was the comment of the PM that rather than being the largest importer of the defence wares, he wanted the domestic manufacture of defence equipment to go up.
Speaking at the ‘Aero India 2015’ show in Bengaluru, the Prime Minister wanted India to enhance its defence preparedness and the focus of the Government was to cut down on imports and develop the local defence industry. He assured that there would be room for all – domestic public and private sector companies and foreign players.
He also urged the foreign manufacturers not to be content with being mere sellers of defence wares but to forge strategic partnership with Indian firms and make them part of their global supply chain.
The comments of the PM served as a booster to stocks related to defence sector with at least four of them hitting fresh 52 week highs today.
The biggest gainer in terms of value was Bharat Electronics Ltd that vaulted by ₹289.55 or 7.91 per cent to close at ₹3950. The stock had touched a new yearly high of ₹4144.90 before ceding part of its gains. Another major PSU gainer was BEML Ltd that jumped by ₹34.10 to ₹990 at the close. This stock too touched a new 52 week high of ₹1012.80.
Pipavav Defence and Offshore Engineering rallied by 14.09 per cent or ₹9.75 to ₹78.95 and this stock reached a new yearly high of ₹82.35. The counter witnessed an amazing trading volume of 4.11 crore shares on the NSE. Bharat Forge also sizzled today, gaining ₹52.75 to close at ₹1228, after touching a new yearly high of ₹1229.90. Astra Microwave Products Ltd jumped by ₹22.10 to close at ₹154.15.
Among the big players to gain were Mahindra & Mahindra and Larsen & Toubro. M&M gained ₹16.40 to end the day at ₹1226.85 and L&T shares closed higher by ₹15.10 at ₹1663.55.
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