PM Modi US visit: Why stock market experts are bullish on drone stocks — explained
PM Modi US visit: Investors are advised to look at listed defense drone manufacturing companies as they might be required to meet the demand emerging in medium to long term, say experts
PM Modi US visit: Amid prime Minister Narendra Modi's state visit to the US, speculations are rife about $3 billion defense drone deal that would strengthen the Indian navy and other wings of the Indian defence. Indian stock market is under the buzz that nearly $3 billion armed drone deal is almost complete and India being a hub for drone manufacturing, demand for inhouse defence drone is expected to shot up in medium to long term.
According to Indian stock market experts, a concrete roadmap for defence industry co-operation is one of the major objectives of this PM Modi's US visit. They said that PM Modi is in US and around $3 billion armed drone deal expected to get inked during bilateral defence agreement between the world's largtest emocracy and world's strongest democracy. In the wake of this defence drone deal, they advised Indian stock market investors to look at listed defence drone manufacturing companies as they might be required to meet the demand emerging in medium to long term.
Speaking on outlook for defence drone making stocks in India after this PM Modi's US visit, Aamar Deo Singh, Head Advisory at Angel One said, "The establishment of a power balance is crucial to India's military alliance with the United States, therefore the biggest democracy in the world is working closely with the oldest democracy in the world to improve their defence ties. With the $3 billion armed drone sale nearly complete, Indian defence industries will have more chances going forward as India establishes itself as a manufacturing hub."
PM Modi in US: Stock market buzz
On expected outcome from PM Modi's US visit, Vaibhav Vidwani, Research Analyst at Bonanza Portfolio said, "One of the main objectives of PM Modi's visit, according to the external affairs ministry's statement on Monday, is anticipated to be a roadmap for defence industry cooperation. All facets of defence co-production and co-development will be a part of discussion during the meeting between US President Joe Biden and Prime Minister Modi, foreign secretary Vinay Mohan Kwatra addressed during a news briefing in the nation's capital.PM Modi's much-anticipated visit to Washington is seen as an occasion when the two countries could strike some key defence deals."
On why market is expecting drone deal from PM Modi's US visit, Bonanza expert said, "Last week, India's Defence Acquisition Council (DAC) approved the purchase of US-Made Predator drones, arguably the best in the world. The deal will cost India around $3.0 billion for 31 high-altitude, long-endurance Predator-B drones. India already operates two Sea Guardian drones, an unarmed version of the deadly Predator series."
Vaibhav Vidwani of Bonanza Portfolio said that India is interested in the MQ-9B SkyGuardian and MQ-9B SeaGuardian variants of these drones, which are designed to operate via satellite and have endurance of more than 30-40 hours. These drones can fly in all weather conditions with payloads of more than 2000 kg.
Drone stocks to buy today
Asked about the drone stocks that one can buy today, Aamar Deo Singh of Angel One said, "Given the enormous potential in aerospace and defence, businesses like Bharat Electronics, Bharat Dynamics and Paras Defence are just a few of the businesses that stand to benefit."
On defence drone stocks to buy today, Vaibhav Vidwani of Bonanza Portfolio listed out three stocks for medium to long term and those three shares are RattanIndia Enterprises, Paras Defence and space Technology and Droneacharya Aerial Innovations.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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