While the rest of the world is left stumped by the power of India's frugal approach to land on the moon by spending just Rs 615 crore, Dalal Street investors are generously pouring thousands of crores of rupees in almost all stocks that have something to do with aerospace
In the first four trading days of the week, the combined market capitalisation of a group of 13 space-related stocks has skyrocketed by over Rs 30,700 crore.
Shares of the little-known smallcap company Centum Electronics, which supplied critical modules and systems to ISRO for Chandrayaan-3, have zoomed 26% in the week. Avantel, Linde India, Paras Defence and Bharat Heavy Electricals stocks also saw impressive double-digit upsides this week.
The 'moon madness' is so deep that shares of conglomerate Godrej Industries rallied over 8% as investors presumed that Godrej Aerospace, which supplied critical components to ISRO, is its subsidiary. The company later clarified that Godrej Aerospace is not an arm of Godrej Industries.
The list of companies that played a role in making India the first nation to land on the unexplored south pole of the moon is long.
While Larsen & Toubro (L&T) was involved in the moon mission starting from manufacturing of subsystems to mission tracking, defence PSU Mishra Dhatu Nigam supplied critical materials for the LVM3 M4, a three-stage heavy lift launch vehicle.
PTC Industries supplied pump interstage housing, and MTAR was involved in supplying equipment such as Vikas engines, and cryogenic engine subsystems including turbo pump and booster pump. Paras supplied the navigation system for Chandrayaan-3 while PSU BHEL supplied titanium tanks and batteries.
While it is quite possible that a number of these Indian companies may get global attention in the $447 billion space market, investors must look at the order book and financial statements together while finding a potential stock to bet on and not get carried away by the upbeat sentiment.
While pointing out other upcoming missions of ISRO like Gaganyaan, Aditya L1, XPoSat, NISAR and SPADEX, Apurva Sheth of SAMCO Securities said space and defence stocks is a megatrend that investors must look at the order book and financial statements together while finding a potential stock to bet on and not get carried away by the upbeat sentiment.
While pointing out other upcoming missions of ISRO like Gaganyaan, Aditya L1, XPoSat, NISAR and SPADEX, Apurva Sheth of SAMCO Securities said space and defence stocks is a megatrend that investors must look out for in the years to come.
"Stocks such as MTAR Technologies, Bharat Electronics and Hindustan Aeronautics look interesting due to their robust order books, sound fundamentals and India’s increased focus on indigenous production," he said.
StoxBox is betting on HAL and Bharat Electronics (BEL). "The success of the Chandrayan-3 mission will open up doors for various allied sectors such as aerospace, defence and telecommunication (satellite communication and navigation) as well as companies involved such as L&T, HAL, BEL and MTAR Technologies. Due to the mission’s success, a number of these companies have now got the attention of global investors as well," Manish Chowdhury, Head of Research, StoxBox, said.
India, which has a less than 5% market share in the $447 billion global space market, opened its space sector for private companies in 2023 with a HAL-L&T JV winning its first order worth Rs 860 crore to build five end-to-end polar satellite launch vehicle (PSLV) rockets.
“India is in the top 3 space-tech nations and has suppliers who have diversified businesses. In this context, EPC and manufacturing sectors can continue to benefit from competitive procurement by the government,” said Abhishek Banerjee of Lotusdew Wealth.
As far as investment in space stocks is concerned, analysts say it could be a multi-year mega trend and therefore investors must look at the bigger picture rather than chase momentum that can fizzle out in no time. "The space industry can sometimes attract speculative investment due to its dynamic and transformative nature. Rapid developments, breakthroughs, and announcements can lead to short-term fluctuations that attract traders seeking quick profits," said VLA Ambala of Stock Market Today.
Just like the moon, the market too has its own cycles and Indians are euphoric about both.
By Nikhil Agarwal
https://economictimes.indiatimes.com/markets/stocks/news/mapping-moon-madness-rs-615-crore-chandrayaan-3-creates-rs-31000-crore-stock-rally/articleshow/103043796.cms
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