Should you invest in defence sector for long-term?

Everyone wishes to buy those stocks that could be turn into multibaggers in future. Last year, when JP Associate was around Rs.6, i recommended it to buy because of higher assets value and potential of company. Now, it has turned into Rs.22 means more than 300 percent return in last one year. Jaypee Infra was also my recommendation to buy at levels of Rs.8 which is now at Rs.21. Now, i have neutral view on JP Associate for short-term while i maintain a hold rating on Jaypee Infra. Only Jaiprakash Power has buy rating from my view.

In the earlier time of 2017, i suggested Jindal Steel, GMR Infra, South Indian Bank, Havells India, Muthoot Finance, Kansai Nerolac, Unitech, DLF, and many more to buy for short-term and now all of them have gave more than 50 percent return in just 3 months. Note that i still maintain a buy rating on Unitech for short-term.

Defence Sector with great opportunities

Those who missed this calls for short-term and long-term or those looking for another multibagger group or sector now have opportunity to invest in Defence Sector. Earlier, i was not much active towards defence sector for investment purpose. But now when our government is trying to allow different sectors to achieve what they can, i think one should go long with Defence sector. Every week, there is a headline for Defence sector such as a new Joint Venture, project order from Government of India or from other nation, acquisition etc which means that Indian Defence sector is now getting some importance at both national and international levels.

Prime Minister of India, Mr Narendra Modi, had launched the ‘Make In India’ program to place India on the world map as a manufacturing hub and give global recognition to the Indian economy. While India is expected to become the fifth largest manufacturing country in the world by the end of year 2020. Recently, Tata Power’s SED CEO stated that an order worth Rs 27,000 crore will be available for the defence private firms in the next two years.

Although i think defence stocks are available at very cheap rates. And i think whenever the rally would come in sector may be in short-term or long-term, it would be a best reward giving rally. Therefore, i think small investors or public should make some investments in sector for future gains.

Stocks to buy from defence sector

BEML, Punjlloyd, Reliance Defence and Astra Microwave are my four picks from defence sector for long-term investment. BEML and Punjlloyd are my potential buys. Both stocks are available at cheap rate in compare to their fundamentals. While Reliance Defence and Astra Microwave looks attractive as per their future that is going to be great. Although, all of them are great stocks to buy for long-term especially Punjlloyd which i think could be a multibagger stock. However, one who likes to invest in large companies can go with L&T, M&M and Tata Motors. Because of big name in Infrastructure, i think L&T may get heavy projects and orders while tata motors and M&M may get orders for manufacturing Army Vehicles.

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