RVNL, HAL, BHEL, IRCON, GRSE, HAL: Stocks to buy; target prices for defence, railway shares

Antique Stock Broking in its fresh note on project awarding said it likes nine stocks including Bharat Heavy Electricals Ltd (BHEL), PTC Industries Ltd and Siemens Ltd in the industrial segment and IRB Infra, NCC and HG Infra Engineering Ltd in the infra segment amid a spurt in new project announcements. Transformers and Rectifiers (India) Ltd, Hitachi Energy and Kirloskar Oil Engines Ltd are three other stocks that the brokerge prefers to play the capex revival theme.

Antique Stock Broking said the new project announcements registered 100 per cent spurt in November 2024 to Rs 3.2 lakh crore, driven by manufacturing (up 146 per cent), infrastructure (up 98 per cent), and electricity sectors (up 79 per cent).

With this, the total project announcements in the first eight months of FY25 jumped to Rs 22 lakh crore, up 28 per cent YoY.

Antique Stock Broking said the slowdown in awarding this year is mainly because many segments have not resumed awarding contracts post the elections at the same pace.

"The muted awarding this year post the Union Election is similar to the one we witnessed post the previous Union Election in FY20. However, the budgetary allocation for infra in the final budget is similar to the one in the interim budget and thus implied 2HFY25 capex is Rs 7 lakh crore. Moreover, the overall robustness in new project announcements and the recent uptick in tendering activities indicate that awarding will pick up going ahead," it said.

The brokerage noted that tenders floated in November 2024 were up 65 per cent YoY to Rs 1.4 lakh crore, largely dominated by roadways at Rs 49,400 crore, contributing 34 per cent to the total value of tenders floated.

"For 8MFY25, Rs 8.9 lakh tenders were floated, up 9 per cent YoY, despite a weak Q1 on account of the Union Election. Awards too were healthy in the month that went by at Rs 78,500 crore, up 157 per cent YoY, mainly attributable to three coal power stations worth Rs 44,100 crore awarded by NTPC to L&T (two stations) and BHEL (one station)," it said.

Antique Stock Broking has a target price of Rs 364 on BHEL. It finds Hitachi Energy worth Rs 17,315 while it sees Kirloskar Oil Engines Ltd at Rs 1,550. The targets for the three stocks suggest 35-52 per cent upside potential ahead. The brokerage has a target of Rs 8,856 on Siemens, Rs 395 on NCC, Rs 1,792 on HG Infra and Rs 1,187 on TRIL.

In the note, Antique Stock Broking also updated the list of stocks under its coverage. The sector-wise coverage included target prices for many sectors and stocks including that from defence and railways.

Bharat Dynamics (Buy, target: Rs 1,357), Bharat Electronics Ltd (Buy, target: Rs 373), BEML (Buy, target: Rs 5,185) and Garden Reach Shipbuilders (Buy, target: Rs 1,783) are a few defence stocks where Antique recommended 'buy' ratings.

Hindustan Aeronautics Ltd (target: Rs 5,902) and Mazagon Dock Shipbuilders Ltd (target: Rs 5,513) are also 'Buy' calls but Antique prefers PTC Industries among defence names. Its target at Rs 19,653 suggests 19 per cent potential upside.

Among railway stocks, Antique has 'buy' on Titagarh Rail Systems Ltd with a target of Rs 1,712. IRCON International (target: Rs 205), Jupiter Wagons Ltd (target: Rs 507) and RITES (target: Rs 325) are three 'Hold' calls while the brokerage has 'Sell' rating on RVNL with a target of Rs 251, suggesting 35 per cent potential downside.

On YTD basis, awarding activities are yet to pick up in FY25, with six of the eight months of FY25 so far showing YoY decline. "Recent announcements and tendering are expected to translate into awarding growth and the capex cycle is expected to continue. Our top picks in infra are NJCC, HGINFRA, IRB and in industrials it is PTC Industries, BHEL, SIEM, KOEL, TARIL, and Hitachi Energy," Antique said.