How to Analyse Defence Stocks? India's Defence Sector | HAL, BEL, Bharat Dynamics, Mazagon, MTAR

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The growth & modernization of India's Defence and Aerospace sector is a priority area for the Government of India who has set a target of achieving a turnover of $25 billion and a $5 billion export target by 2025. In this video, I shall examine India's defence sector and importantly, the metrics that need to be looked at for identifying robust investment opportunities
The recent transformation in India's defence sector is focused on a few areas:
1. Policies focused on indigenization, advocating for self-sufficiency in manufacturing
2. Building of an idea & innovation centre with a robust ecosystem incl. joint ventures and foreign collaborations
3. Funding for research and development
4. Increasing defence exports including our weapon systems like Brahmos and Tejas light combat aircrafts
5. Private sector participation
The four key metrics to look at when examining a defence sector company are:
1. The order book and steady inflow augments sector growth and financial stability
2. Revenues from product sales and services with maintenance, repair and overhaul services emerging as revenue boosters.
3. Capital expenditure as it drives growth and innovation
4. Lastly, diversification and a balanced portfolio ensures resilience against market fluctuations and changing priorities
👉 Download the Fisdom app:
fisdom.onelink.me/VCH6/Shanka...
👉 Video Chapters:
00:00 India's Defence Sector
01:24 Challenges Faced by Indian Defence until 2017
03:36 Transformational Changes in Indian Defence since 2018
07:51 Overview of Financial & Operational Metrics
08:40 1. Order Book
09:53 2. Revenue (Sales)
13:11 3. Capital Expenditure
14:17 4. Diversification
15:48 Shankar's Viewpoint
👉 Useful Reading Resources:
‣ Fisdom's Summary Post on Indian Defence Sector: www.fisdom.com/research/defen...
‣ Forbes Article on Why India's Defence is Booming? www.forbesindia.com/article/t...
‣ ORF Research on India's Defence Budget: www.orfonline.org/research/hi...
‣ Economic Times article: government.economictimes.indi...
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Disclaimer: I am not a SEBI registered investment advisor or research analyst. I am not registered with PFRDA or IRDA either. The content posted on this platform is purely for educational purposes and none of it constitutes investing or trading advice. Viewers should do their own research and diligence before investing or acting on the information presented. Some of the links I have posted in the video, the description, the comments and other related resources might be affiliate links

[@shankarnath]

Congratulations to ISRO team for the historic success of Chandrayaan3 mission. Also congratulations to the companies behind the mission: 🚀 MTAR Technologies: Made core parts of the Rocket engines and core pumps of Cryogenic engines required for take-off. 🚀 Larsen & Toubro: Made critical booster segments, did system integration and proof pressure testing for the Chandrayaan at its facility in Powai. 🚀Godrej Aerospace: Supplied hardware liquid propulsion engines and satellite thrusters 🚀 Tata Advanced Systems: Core manufacturer of Chandrayan 3’s Lander 🚀 Hindustan Aeronautics: Worked on development of lander and key mechanical support equipments 🚀 Bharat Electronics - Chandryaan3’s payloads 🚀 BHEL - Supplied 100th battery pack to ISRO for Chandrayaan 3 🚀 Mishra Dhatu Nigam (Midhani): Critical materials such as Cobalt and Nickel base alloys and special steel for various components. 🚀 Centum Electronics: Large component supplier - makes 300-500 electronics parts for each mission 🚀 Walchandnagar Industries: Supplied components for all 48 launches by ISRO till now 🚀Taneja Aerospace: Builds important structural assemblies for HAL and ISRO for their booster rockets. 🚀Electrosteel Castings: Supplied DI Pipes to the Satish Dhawan Space Centre, Sriharikota Additional material: www.indiatimes.com/worth/news/companies-behind-chandrayaan-3-successfull-launch-609360.html?

[@chetan_l]

The best Guru dakshina is in the form of learning outcomes. Kunal has proven himself to be a true chhaatra to an enlightened Guruji. Kudos, both of you, and the team that works for you. Top quality output... As always

[@shankarnath]

Thank you! Glad you liked it

[@shankarnath]

I hope you are taking a stab at that little homework I gave in this video at 11:00 To add a dash of motivation, the folks at Fisdom will be awarding a prize 🎁 (non-monetary) to the top 3 submissions You can email me your revenue analysis at [e-mail] latest by 13th of August and your responses will be evaluated by the research team at Fisdom for the process you’ve followed, the estimates made, the workings, the assumptions used and ofcourse, your final estimate of HAL's revenues for FY25 and FY26. This need not be long but please ensure your responses are organized & easy to understand .. and feel free to use text and a worksheet to make your point. I am also enclosing some additional material & research reports that can help you with your analysis: ‣ Defence Report by Fisdom Research: www.fisdom.com/research/defen... ‣ Latest concall transcript notes by ICICI Direct (May 2023): www.icicidirect.com/mailimage... ‣ HAL Analyst meet PPT (May 2023) : www.bseindia.com/xml-data/cor... ‣ Research Report by Way2Wealth (Jun 2023): www.way2wealth.com/Reports/RR... Wishing you the very best!

[@mazziabs]

The thumbnail and top gun part is 🔥🔥🔥

[@shankarnath]

Thank you!

[@shrikantlimaye9213]

हमे आज़ादी मिली खडग बिना ढाल ये पिछे रखा ये बहुत खूब

[@chari572]

Namaskar ... 🙏 Good one ... Timely required one ... Pubic contribution to defence sector ... Deposit in our country Defence sector is very big satisfaction for patriot ... and also wealth creation for our country and secondly to us also ... Jal Hind .... 🙏 Bharath Maatha Ki Jai ...🙏

[@shankarnath]

Glad you found it useful 🙌

[@shilpiburman7102]

Whoa! What a scream of an entry Shankar ❤

[@shankarnath]

Thank you! 🙌

[@SandeepSir2603]

Great video .. keep u p the great work ...Thanks

[@shankarnath]

Thanks for watching!

[@nitikbadjatya]

Your thumbnails are amazing ❤

[@shankarnath]

Thank you!

[@arpitamandal6469]

Hello Shankar , I really like your work.. thanks for enlightening our knowledge 😊

[@shankarnath]

It's my pleasure. Thank you very much for your kind words & appreciation

[@NoBs4jr]

Hi Shankar, Subject: 1. "Understanding Mutual Fund AUM: Initial Investment vs. Total Value" 2. "Exploring Arbitrage Funds as Potential Liquid and Low-Risk Emergency Funds" 1. When we look at the AUM (Assets Under Management) for a fund, does it represent the total money invested by everyone, or is it the current value of all investments? For example, if a fund's AUM is 1 Crore and it grows to 2 Crore next year without new investments, is the AUM the initial 1 crore invested or the total value of 2 Crore? 2. Can arbitrage funds be used as new liquid/emergency funds due to their low risk and equity tax benefits, if we keep the money there for the lock-in period/exit load period, typically 1 year? Thanks for helping me understand! Best regards.

[@shankarnath]

Hello: 1) 2 crores is the AUM of that fund now 2) Apologies, I don't have an opinion on this. Personally, I don't look at taxes or returns when tagging an "emergency fund". For me, immediate pullout of money is most important as waiting for 2 days for redemption in times of emergency is not an ideal scenario Hope this helps.

[@rakeshpandey4995]

Sir aapne to Firing he kar diya ..fnatastic knowledge.

[@shankarnath]

Thank you!

[@aashusingh1059]

Thumbnail is Zordaar.. looks like Tom Cruise..👏👏

[@nitikbadjatya]

True❤😂

[@mohan7642]

Awesome content Shankar, I'm your fan. This content deserves lot more views and likes.

[@shankarnath]

Thanks a ton. Glad you like it

[@NitishYadav-oc8hl]

We need a follow-up video and introduce a new area of investment

[@joethim]

The first visual itself needs a 👍

[@motivationstation1853]

TO AI

[@shankarnath]

Thank you!

[@AtamjeetSingh1]

I have Hal and bel both... should I hold it for long ... Please reply..

[@vivekphatak5800]

Very well explained..thanks

[@shankarnath]

Glad it was helpful! 🙌

[@BeNOone902]

Gratitude:-)

[@deepeshkumar100]

Thanks

[@shankarnath]

Thank you Deepesh for this kind gratuity and for your appreciation!

[@lifeofav1265]

What about Zen technology Sir?

[@focus15624]

Video sound is low from your side. Although, content is fantastic!

[@snehilkamal1919]

Shankar Sir Your Editing Skills are 🔥 Content is even Better!❤

[@shankarnath]

Thank you so much 😁

[@snehilkamal1919]

🙏🙏

[@priyankashetty1124]

Hi Shankar.. thumbnail, your presentation and your video contents are great !!! Please make video on effect of central elections on stock market in India..

[@shankarnath]

Thank you for the appreciation and for the suggestion. I'll add it to my content queue

[@preksha888]

Superb content

[@shankarnath]

Thanks!

[@channabasavas.u]

Thank u sir🎉🎉🎉, Sir please do follow up videos on defence sector stock.

[@shankarnath]

Most welcome

[@sudheerk67]

Shankar ji, You have got very good acting skills and screen prrsence is top notch. 😂

[@shankarnath]

So nice of you. Thank you very much :)

[@akshaydikare3157]

Great insights, informative research. Can we have a more analysis on Paper industry, fmcg industry, AGROCHEMICALS OR FERTILISER INDUSTRY, textile industry.❤

[@shankarnath]

Thanks for the suggestion

[@alphabeta644]

Lovely intro and even 100x better than that content. Kudos

[@shankarnath]

Thank you very much!

[@sreekumar86]

I follow lot of channels for my edu, no one explains like Shankar, hence I look Forword for upcoming videos. Also i am surprised to observe low subscription compared to the quality.

[@shankarnath]

Glad you are finding good use of my videos and the content. Thank you!

[@sreekumar86]

@@shankarnath How can I invest thru you or "with your stock ideas " for long term. Risk mine, but do you provide any advice service or any other way I can benefit from your vast knowledge on stock ideas?/ or review of my portfolio for a fee?

[@shankarnath]

@@sreekumar86 I don't do either of these, Sreekumar. I am focussed on education & thats where I am at peace (not exactly as my current occupation is a stressful one). Yeah, and that's that - I don't want to take in additional stress with fund management and incidental activities for now. There is still a lot to do in the teaching framework.

[@thedarkknightwillrise23]

Jai Hind 🇮🇳

[@shankarnath]

Jai Hind 🙌

[@CA.SanthoshMathew]

Hi Shankar, the content as usual is fabulous and with each video the quality of your content is increasing....kudos for that. I also read through the fisdom report which again is an insightful one. I'm now planning to enroll for one of the programmes of fisdom. Meanwhile I was intrigued by the order book and backlogs of BEL, is there a website or platform where we can source such info...im sure it is a game changing info for any serious investor. Thanks once again for the effort you are taking in bringing this video to us. All the best!

[@shankarnath]

Thank you for your kind words and appreciation, Santhosh. The order book and backlog information is gathered from two sources: a) the earnings transcript that's published every quarter and b) research reports from brokerages (where the analyst typically does a read out of the previous transcripts and the financial statements). You are right, as an investor this is very good information. I have half-a-mind to start a membership program that can compile a lot of this information that's floating around, analysing it and to present it (in text format) for the keen investor. I'm not sure though, how many people will want it in this format? Most might be interested in the sought after format - "tell me what to invest in?"

[@CA.SanthoshMathew]

That will be great, if you can compile such valuable info. It will be a herculean task though...I'm in already as a member 😀@@shankarnath

[@deepeshkumar100]

Hey Sankar.. time to give hike to your Thumbnail creator.. 😊

[@hafeezrahman9255]

He creates his own thumbnails😅

[@shankarnath]

Hi Deepesh, pls use the "Super Thanks" button for expressing your gratitude. I can assure you the entire amount will go to the thumbnail creator

[@deepeshkumar100]

@@shankarnath Done! Content also equally good. Btw .. out of curiosity who provides the idea for the thumbnail and intro? is it own or your creative team ?

[@shankarnath]

Cool. Thanks for the Super Thanks! So far, it's been me in terms of topic selection, research, script and thumbnails. Even when it comes to editing, I have to give a PPT to the freelance editor with every frame decided (generally this comes to 90-110 slide PPT; can't help it as the editor doesn't understand finance or wont know how I want the end product to come out) .. so it's really hard work. Thanks to the association with Fisdom, I have started to use the services of a freelance researcher who can help me with the material for some of the videos. This video was a 1st in that direction.

[@deepeshkumar100]

@@shankarnath I have been following you from ET Money times and happy to see the growth in your channel, hope to see you soon in 1M subscriber Finfluencers group! Also one suggestion - increase the drama bit more :) to speed up subscriptions! We Indians love theatrics a bit more than others :)

[@ShadowsGaloreTV]

A big question is, what will happen if there is a change of government in 2024?

[@chandrasekhar-jf8fc]

All credit goes to modi

[@puru2652]

You're not entirely right about HALs Tejas orderbook and revenue recognition. Out of 40 mk1, over 25 have been delivered. Rest in progress Rest of 43 mk1a will start delivery from Feb-24. Mk 2 order has not yet been placed and it is still in development. So the revenue recognition has started as of early 2022.

[@shankarnath]

Hello, I went with what the HAL management said in the latest earning call. The delivery schedule was explained in page 7 of the PDF -- hal-india.co.in/Common/Uploads/DMS/TRANSCRIPT_17052023_new.pdf .. by the CFO, Mr. CB Ananthakrishnan. Maybe I misunderstood him; thank you for sharing your insights.

[@viswa5409]

I like your way of presentation. But an in depth analysis of the stocks like that in Indian Investor channel will take your subscriber count a long way. I know I’m giving a free advice.

[@shankarnath]

Thanks for the suggestion