Cochin Shipyard, Paras Defence, IdeaForge & GRSE shares tank up to 7%: Here's what you can do

Defence counters such as Cochin Shipyard Ltd, Paras Defence and Space Technologies Ltd, Ideaforge Technology Ltd and Garden Reach Shipbuilders & Engineers (GRSE) Ltd recorded a sharp downtick in Tuesday's trade, sliding up to 7 per cent. Last checked, Cochin Shipyard was down 6.75 per cent at Rs 1,851, Paras Defence slipped 5.67 per cent to Rs 1,610.85, IdeaForge fell 4.02 per cent to Rs 548.15 and GRSE shed 2.40 per cent to trade at Rs 2,422.95.

Three out of these four shares were in the ASM (Additional Surveillance Measure) framework. Bourses BSE and NSE have put the securities of Cochin Shipyard, Paras Defence and GRSE under the ASM framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

It must be noted that some profit booking was likely in these stocks post a stellar recent upmove. Dharmesh Kant, Head of Equity Research at Cholamandalam Securities, believes there could be limited upside potential in the near term, but decent gains can still be seen in these counters from a medium-term perspective.

"I don't think there's a limited upside. Maybe in the near term, there's a limited upside, but if you are looking even for the medium-term (maybe a 6-month perspective), a good amount of money can still be made if you are using these declines as an opportunity to buy. But the only advice would be, don't go all out. Go in a structured SIP (Systematic investment plan) kind of measure. If the stock starts building up, you add one-third more. So, use a SIP method for buying any quality companies from here on as the market is likely heading towards an all-time high. So, one has to be a bit mindful of that fact," he told Business Today.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, suggested considering some profit booking as these counters have witnessed exuberance.

"Even though there is an earnings visibility, these stocks have entered the overbought zone. One should book some profit off the table," he stated.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi, also echoed that some profit booking has occurred in defence stocks near the resistance zone.