Defence Stocks Rally: Expert's Defence Stock Picks and Concerns: GRSE, Cochin, Mazagon, HAL, BEL

Defence stocks recently experienced a significant rally, driven by a German trigger, but is this momentum sustainable? On Business Today TV's "Market Today," Deven Choksey, MD, DR Choksey FinServ Private, shared his views on the sector's future. He reiterated his long-held belief that defence companies have a fantastic future due to government spending, crucial for India's GDP growth aspirations. However, he cautioned against expecting growth rates significantly higher than the nominal GDP growth of around 11.5%. Deven Choksey expressed concern that the current rally might be driven by momentum rather than fundamental value, with investors justifying high PE ratios of 40-60 based on perceived growth. He emphasized that while defence companies are performing well, their growth rate may not support such lofty valuations. He advocates for investing in companies with strong fundamentals at fair prices, rather than chasing momentum at crazy valuations. He suggests a cautious approach to GRSE, Cochin, Mazagon, HAL, and BEL, favouring a fair price performance over speculative buying.