Shares of BEL had also declined 19% on Tuesday.
Another brokerage firm Emkay in its note on Tuesday advised investors to shift from PSUs into defensive sectors like FMCG.
CLSA though, has raised its price target on Bharat Electronics to ₹294 from ₹207 earlier. The brokerage wrote in its note that expensive valuations leave little space for execution error among such companies.
After Tuesday’s fall, shares of Bharat Electronics are trading at a one-year forward multiple of 35.19 times price-to-earnings, which is still higher than BEL’s five-year average price-to-earnings multiple of 31.6 times.
CLSA also expects the new Modi government to walk-the-talk for the defence ‘Make in India’ and execute the $43 billion in Indian-made products approved by the Defence Acquisition Council in financial year 2024.
Additionally, CLSA has retained its “outperform” recommendation on Hindustan Aeronautics with a price target of ₹4,731.
Shares of Bharat Electronics, even after Tuesday’s drop, are still up 40% in 2024 and have risen 122% in the last 12 months.
Shares of Hindustan Aeronautics, which also declined 17% on Tuesday, are up 54% so far on a year-to-date basis and are up over 170% in the last 12 months.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.