Best Aerospace Stocks in India 2023
Investing in aerospace stocks within India provides an avenue into a sector marked by government focus, spanning aviation, defence, space exploration, and technology. Aerospace companies operate across a spectrum encompassing aircraft manufacturing, defence contracts, and innovative space missions.
With technological strides influencing the industry, aerospace stocks enable exposure to progressive trends like electric aviation and satellite communication systems, A judicious approach entails meticulous scrutiny of the financial standing of Indian aerospace companies, evaluation of their pivotal projects, and staying attuned to global economic and geopolitical variables that wield sway over the sector's trajectory.
What Aerospace Stocks to Buy?
Aerospace is a nascent sector in India with companies making their presence felt only in the past few years. But it is also set to grow at a fast pace, leading to several opportunities in aerospace stocks. The government’s Make in India initiative also augurs well for the sector which is likely to receive many sops for setting up manufacturing capacity in the country.
One has to check the fundamentals and technical of each company to assess which stock to buy, but the sector as a whole is set to grow at a fast clip.
Overview of Best Aerospace Stocks
Hindustan Aeronautics: India’s biggest player in the aerospace sector, state-owned Hindustan Aeronautics offers one of the best opportunities among aerospace stocks with the prices at a near 52-week high also above the long-term average. Hindustan Aeronautics has a good pipeline of orders from the government and is also pushing its products in the overseas markets.
Bharat Electronics: This is another stock that provides a good opportunity in the defence and aerospace segment. The stock is near a 52-week high and above its medium and long-term moving averages. Its annual and quarterly profits have been improving, attracting foreign investors. Many brokers have recently upgraded the target price on the stock.
Data Patterns: A vertically integrated defence and aerospace electronics solutions provider, Data Patterns offers a good opportunity to invest in the aerospace sector. The stock is near a 52-week high and has strong momentum. A low-debt company, Data Patterns has high EPS growth and decent quarterly results.
Mishra Dhatu Nigam: A state-owned company, Mishra Dhatu Nigam has been making a foothold in the aerospace industry through a tie-up with Boeing to develop raw materials for aerospace parts and defence components in India. While MFs have decreased their exposure to the stock, it is still trading near a 52-week high and above long-term averages and has earned a hike in target price by many brokerages.
MTAR Technologies: A parts supplier for various industries, including aerospace, MTAR Technologies’ stock price is above the short-, medium- and long-term moving averages. A low-debt company, MTAR Technologies has seen a positive breakout even at second resistance, leading to increased interest from foreign investors.
Paras Defence and Space Technologies: Another good opportunity among the best defence and aerospace stocks, Paras Defence and Space Technologies has low debt and its stock has seen a positive breakout from first resistance. Its current stock price is above the short-, medium- and long-term moving averages and the company has low debt and zero promoter share pledge.
Apollo Micro Systems: A low-debt company, Apollo Micro Systems has also seen promoters cutting down share pledge. It recently saw its highest recovery from a 52-week low, attracting the interest of foreign investors.
Taneja Aerospace and Aviation: The stock has gained nearly 20% in the recent past and has seen a positive breakout from second resistance. A zero-debt and zero-promoter pledge company, Taneja Aerospace and Aviation is seeing strong momentum with prices above short-, medium- and long-term moving averages.
Droneacharya Aerial Innovations: Droneacharya offers drone-as-a service, multi-sensor drone surveys, data processing of drone data, drone pilot training and specialized GIS training. The stock is a good opportunity among the best aerospace stocks return on equity improving in the past two years.
Global Vectra Helicorp Ltd: Global Vectra is mainly engaged in helicopter charter services for offshore transportation, servicing the oil and gas exploration and production sector in India. The stock has seen strong momentum with price above short-, medium- and long-term moving averages.
Performance of Top 10 Aerospace Stocks
Who Should Invest in Aerospace Stocks?
Anyone looking to participate in India’s journey into the defence and aerospace segment should invest in such stocks. Like any other stock, aerospace stocks do also carry risks inherent with any company, but the sector as a whole can be seen as a sunrise sector.
Benefits of Investing in Aerospace Stocks
Investing in aerospace stocks offers the potential for diverse benefits, stemming from the sector's technological innovation, and opportunities across commercial aviation, defence, satellite communication, and space exploration. The industry's consistent growth potential, backed by government contracts, technological advancements, and expanding space ventures like tourism and electric aviation, underscores its appeal.
Things to Consider Before Investing in Aerospace Stocks
Before making investment decisions, it's crucial to give careful thought to several key considerations that ensure well-informed choices, align with your risk tolerance and investment objectives:
Industry Dynamics: Gain comprehensive insights into the aerospace sector's intricate dynamics, spanning commercial aviation, defence, space exploration, and the associated technologies.
Technological Trends: Stay abreast of the ongoing technological strides shaping the industry.
Company Analysis: Undertake meticulous research into aerospace companies, delving into their financial robustness, the proficiency of their management teams and ongoing projects.
Government Contracts: Evaluate the extent of the company's reliance on government contracts and their competence in securing and executing these contracts.
Exports: Scrutinize the company's global footprint, recognizing the diversification advantages and access to varied markets that international exposure can offer.
Regulatory Landscape: Comprehend the regulatory intricacies that govern the aerospace sector, encompassing safety standards and compliance requisites that can wield influence over operational costs and practices.
Innovation Potential: Gauge the company's dedication to fostering innovation and undertaking research endeavours, recognizing that technological strides fortify competitiveness and future growth potential.
How to invest in Aerospace Stocks?
One should first decide the percentage of the portfolio they want to invest in aerospace stocks. Thereafter, thoroughly research the sector, pick the companies they want and spread the investment over time.
With the Indian government emphasizing domestic manufacturing and self-reliance, there's a growing potential for aerospace stocks in the country. But like investing in any other sector, one should study the fundamentals of the companies carefully before making any investment.
Frequently Asked Questions
Is it safe to invest in aerospace stocks?
Aerospace stocks would be considered growth stocks due to their ability to rise rapidly.
Is it worth investing in aerospace stocks in 2023?
Most aerospace stocks have been doing well this year, showing promise for the sector.
How much should I invest in aerospace stocks?
One should always diversify their investment portfolio. So, the amount one should invest in aerospace stocks would depend on their asset allocation.
Who is the market leader in aerospace sector?
Hindustan Aeronautics is the market leader in the sector in India.
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