Russian President Vladimir Putin is coming to India on a two-day visit on Thursday. He can reach New Delhi around 4.30 pm. There may also be a discussion on increasing defense cooperation during the summit between Prime Minister Narendra Modi and the Russian President on Friday. Due to this, there is a rise in defense stocks on 4th December. Analysts say that if defense cooperation between the two countries progresses, some big defense companies are expected to benefit.
Nifty India Defense jumped nearly 1 percent on the day. Of the 18 stocks included in this index, except Zen Tech, Astra Microwave Products and Dynamic Tech, all the other stocks are in the green. Shares of Unimech Aerospace and Manufacturing have risen 5 percent. Bharat Dynamics shares are up by 2 percent. Shares of Hindustan Aeronautics Limited, Data Patterns (India), Solar Industries India and Paras Defense and Space Tech are up 1 percent.
Experts’ opinion
Pranay Aggarwal, Director and CEO of Stoxkart, says that Russian President Vladimir Putin’s two-day state visit to India puts renewed emphasis on defense relations. Prominent defense officials and leaders of the arms export sector are also accompanying Putin. This has increased the hope that both the countries can take forward talks on enhancing air defense systems, bringing state-of-the-art missile technology and purchasing advanced stealth fighters. There can also be talks on a new logistics agreement for shared military assistance. Aggarwal said the ongoing summit is expected to accelerate India’s Russia-related purchases in air defense and aviation in the near future.
Meanwhile, Bonanza Senior Research Analyst Nitin Jain said that Putin’s visit is expected to strengthen the defense cooperation between the two countries. One of the main points in defense is the possible purchase of additional S-400 air defense missile regiments. According to Jain, a new proposal related to the S-400 air defense missile system includes a significant technology transfer agreement. This will enable Indian companies like Bharat Dynamics Limited (BDL) to participate in local assembling and production of essential missile components. This can increase indigenous manufacturing capabilities.
Which defense stocks could benefit?
Defense stocks, especially Hindustan Aeronautics (HAL), Bharat Dynamics (BDL) and Bharat Electronics (BEL), are expected to benefit from increased defense cooperation between India and Russia, says Shravan Shetty, managing director, Primus Partners. If any collaboration is announced in the naval sector, stocks like Mazagon Dock Shipbuilders may also benefit.
Bonanza’s Jain said, “Putin’s visit is expected to accelerate defense agreements based on air defense systems, fighter aircraft and missile technology. This will put stocks like HAL and BDL in the headlines.
Siddharth Maurya, Founder and Managing Director, Vibhavangal Anukkara, said that HAL, BEL, BDL and other PSU defense companies have been on an uptrend for many years. Any announcement on joint production, technology transfer or long-term supply agreement between India and Russia can further extend this rally.