Investing in defense stocks with a P/E ratio below the industry average offers promising opportunities. The Indian defense sector is crucial for national security, with a growing focus on self-reliance. Several companies, like Hindustan Aeronautics and Bharat Electronics, currently trade below the average P/E of 65.54, making them attractive for long-term investors.
1. Hindustan Aeronautics Ltd (HAL)
Hindustan Aeronautics Ltd focuses on the design, development, and production of aircraft, helicopters, and avionics. The company provides maintenance and support services while engaging in technology transfer and joint ventures to enhance its capabilities and expand its market presence.
The company has a P/E ratio of 33.93 which is less than the Industry Average of 65.54. In Q1 FY25 HAL reported an 11.06 percent year-over-year increase in revenue from operations to Rs.4,348 crore and a 76.41 percent increase in net profit to Rs.1,436 crore, in the same period. In Friday’s trading session, the company’s share price was closed at Rs.4,161.95 per share, a 0.88 percent down from its previous close.
2. Bharat Electronics Limited
Bharat Electronics Ltd (BEL) specializes in producing advanced systems such as radars, communication solutions, and electronic warfare technologies. BEL focuses on supporting the Indian armed forces while engaging in collaborations for technology transfer and socio-economic initiatives.
The company has a P/E ratio of 47.11 which is less than the Industry Average of 65.54. In Q2 FY25 BEL reported a 14.86 percent year-over-year increase in revenue from operations to Rs.4,605 crore and a 38.35 percent increase in net profit to Rs.1,093 crore, in the same period. In Friday’s trading session, the company’s share price closed at Rs.272.55 per share, a 0.42 percent up from its previous close.
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3. BEML Limited
BEML Ltd operates as a leading public sector undertaking in India, specializing in manufacturing heavy equipment for mining, construction, and defense. The company focuses on three main business verticals: Mining & Construction, Defence & Aerospace, and Rail & Metro.
The company has a P/E ratio of 54.45 which is less than the Industry Average of 65.54. In Q1 FY25 BEML reported a 9.91 percent year-over-year increase in revenue from operations to Rs.634 crore and a 6.66 percent fall to a net loss of Rs.70 crore, in the same period. In Friday’s trading session, the company’s share price was closed at Rs.3,742.95 per share, a 3.32 percent down from its previous close.
4. Cochin Shipyard Limited
Cochin Shipyard Ltd operates as India’s largest shipbuilding and repair facility, focusing on constructing and maintaining naval and merchant vessels. The company highlights advanced technology and offers services such as ship upgrades and life extensions.
The company has a P/E ratio of 40.48 which is less than the Industry Average of 65.54. In Q1 FY25 Cochin Shipyard reported a 60 percent year-over-year increase in revenue from operations to Rs.710 crore and a 66 percent increase in net profit to Rs.181 crore, in the same period. In Friday’s trading session, the company’s share price closed at Rs.1,367.20 per share, a 3.76 percent down from its previous close.
Written by Santhosh
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