Defence Stocks Live Updates: Sanjeev Prasad of Kotak says difficult to justify valuations

– Investors Should Be Careful Of The High Margin Being Reported By Some Defence Cos

– High Margin Of Defence Cos May Not Sustain

– Defence Stocks Valuations Not Making Too Much Sense To Us At This Point

– Cochin Shipyard Trading At High Valuations & Market Cap

– Cost Of Building An Aircraft Carrier Could Range From `50,000 Cr To `60,000 Cr

– Even At A PAT Margin Of 10%, Profitability Remains Quite Muted

– Very Tough To Justify The Valuation Of Many Shipbuilders

– There Is No Way One Can Justify Defense Company Valuations Based Even On Order Books

– “Overweight” rating with a price target of ₹6,105

– HAL has guided for ₹1 lakh crore of manufacturing orders over the next 1-2 year

– Continued trend of 31% EBITDA margins over the medium-term is another positive

– FY26 revenue growth guidance is underwhelming

– After a sharp rally, muted revenue growth guidance will be a sentiment dampener

– Guide for 20-25% top & bottomline growth in FY26

– Strategic end to end contracts end up being slightly lower in margin vs specific products like radars

– May take 1-2 lower margin strategic contracts in order to build capabilities

– Order intake has been weak in FY25 but expected to pick up

– Orderbook expected around ₹1,000 to ₹1,200 crore in FY26

Shares of Mazagon Dock Shipbuilders are down 3.6% in trade on Monday, having surged as much as 20% last week.

Profit booking is also seen in peers like Garden Reach and Cochin Shipyard, both of which are down up to 3%.

Both GRSE and Cochin Shipyard had gained up to 40% last week.

Zen Technologies has been a fabulous multi bagger, and it’s in a super space to be in, right place, right time at the at least for the company. I think great prospects. It is targeting 50% turnover growth, which is fantastic, perhaps may justify the very rich PE multiple it is trading at so very positive on the stock.

But would look to buy at declines, because valuations are certainly on the higher side. Also, one needs to remember that if you look at the history of the company, there’s sort of volatility in the earnings because of the government procurement plans and order book position may change quite a bit quarter by quarter, but nonetheless, I think great prospects for the company.

– HAL shares have opened little changed

– Zen Tech is locked in yet another 5% upper circuit

– Cochin Shipyard shares up 6% in early trading

– Garden Reach shares up 2.2% at the start of trade

– Mazagon Dock shares also gain 2.2% to new highs

– Data Patterns shares surge 6% after Q4 results

– Zen Tech’s anti-drone systems were successfully used in Operation Sindoor

– Have been engaging with the government on future orders

– Expecting several orders to flow in H1FY26

– Expecting revenue growth CAGR of 50% over FY26-28

– Cumulative revenue of ₹6,000 crore expected over next three years

– Expecting orders worth ₹8,000 crore in H1FY26

– Jefferies has a “buy” rating with a price target of ₹6,475

– This is the second-highest price target on the street for HAL

– High margin service income and aircraft deliveries should drive double-digit revenue growth over 3-5 years

– FY26 guidance appears to be conservative

– Further focus on domestic manufacturing likely after India-Pakistan tensions

– Morgan Stanley downgrades the stock to “equal-weight” from its earlier rating of “overweight”

– Price target of ₹5,092

– Margins and new order outlook is strong but market may be concerned about muted execution guidance: Morgan Stanley

– Risk-reward appears balanced and hence the downgrade

– Await a better entry point and stronger execution on manufacturing order book

– Revenue growth of 36% surpassed guidance of 20% to 25% growth

– EBITDA margin of 39% surpassed guidance of 30% to 35%

– Order inflow at ₹355 crore were a miss compared to guidance of ₹700 crore to ₹800 crore

– Strong order book pipeline worth up to ₹3,000 crore over next 18-24 months

– Order inflow in Q1 so far at ₹40.26 crore

– Revenue growth rate of 20% to 25% and EBITDA margins to be between 35% to 40% in FY26

– Aspire to maintain net debt free status

– 20% to 25% revenue growth over the next two-to-three years

– Revenue growth to be between 8-10% in FY26

– To revisit guidance again after six months

– Expect double-digit revenue growth from FY27 onwards, but may happen this year itself

– Adjusted EBITDA margin expected to be at 31% over next 3-4 years

Hindustan Aeronautics (HAL) shared its FY26 guidance in its earnings call that was held after market hours on Friday, while stocks like Zen Technologies and Data Patterns reported results over the weekend.

Both Zen and Data Patterns also shared their outlook for the new financial year.

Bharat Electronics (BEL), the Nifty 50 constituent will be reporting its quarterly results today.

– Garden Reach Shipbuilders shares surged 38%

– Cochin Shipyard shares gained 37%

– Zen Technologies shares went up by 28%

– Data Patterns shares saw gains of 25%

– Mazagon Dock shares saw a surge of 21%

– Bharat Dynamics and BEML also went up by 20% last week

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Defence Stocks Live Updates: Sanjeev Prasad of Kotak says difficult to justify valuations