Defence Stocks: Opportunities, Challenges, and Expert Insights by Mayuresh Joshi. As defence stocks like Cochin Shipyard, Mazagon Dock, and GRSE show remarkable recovery, investors are eyeing this sector with renewed interest. Mazagon Dock has been in focus, with its stock split scheduled for December 27. Are these stocks solid investment opportunities, or do valuation concerns and FRS (forward revenue projections) signal caution? Mayuresh Joshi, Head of Equity Research at William O'Neil India, provides his expert take on the defence sector's prospects. He discusses the significant budget allocations anticipated for the sector and highlights how large order books provide visibility for the next 5–6 years. Companies like Hindustan Aeronautics Limited (HAL) and Mazagon Dock are set to benefit from better operating margins and execution timelines. However, Mayuresh Joshi points out that capacity expansion remains a key challenge. Expanding capacities will be crucial to fulfilling large order books, and while this may initially impact cash flows, it sets the stage for exponential revenue growth in the future. Despite high valuations, Mayuresh Joshi emphasises the sector's long-term potential, driven by steady government spending and stable earnings growth. Investors holding quality names in this space should stay the course, as the sector continues to offer robust opportunities for those with a long-term view.