GRSE, Mazagon, HAL & BEL: Kranthi Bathini sees valuation comfort in these 4 defence stocks

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, on Tuesday said the PSU (public sector undertaking) space became a wider universe at this point of time.

"On the stock-specific front, I still like some names in the defence play. Order books of companies like Garden Reach Shipbuilders & Engineers (GRSE) Ltd, Mazagon Dock Shipbuilders Ltd, Hindustan Aeronautics Ltd (HAL) and Bharat Electronics Ltd (BEL) are quite strong. They have better order execution capabilities which in turn increases their revenue. So, I see valuation comfort in these names. I would accumulate these stocks on dips with a medium- to long-term view," the market expert told Business Today.

Bathini said the valuations are currently entering the attractive zone for the railway space. "If there's some more correction, the margin of safety will go up in this segment. Investors with a long-term view should only consider railway stocks at current levels," he stated.

For PSU banks, the market expert suggested that the risk-reward ratio is in the favour. "But, I'm not in a hurry to buy PSU lenders. I would be very selective with my approach," he said.

Meanwhile, Indian equity benchmarks settled on a mixed note today. The 30-share BSE Sensex pack rose 148 points or 0.20 per cent to end at 74,602 while the broader NSE Nifty index shed 6 points or 0.03 per cent to finish at 22,548. Broader indices (mid- and small-cap shares) declined as well.

11 out of the 19 sector gauges -- compiled by the NSE -- traded in the red. Sub-indexes Nifty Metal, Nifty PSU Bank, Nifty Oil & Gas and Nifty IT underperformed the NSE platform by falling as much as 1.54 per cent, 1.22 per cent, 1.13 per cent and 0.80 per cent. In contrast, Nifty Auto, Nifty FMCG and Nifty Consumer Durables rose 0.51 per cent, 0.32 per cent and 0.54 per cent, respectively.

The overall market breadth was weak as 2,253 shares declined while 1,678 advanced on BSE. 131 stocks remained unchanged.