The ‘Make In India’ Theme Has Been One Of The Biggest Wealth Creators In Last 3 Years | CNBC TV18

Media, everyone but staying with FIS now, there’s a very interesting question that we are asking today and in fact we are asking this question to Nimesh. Have the FIS, miss the Make in India buzz and Nimesh of course I was Privy to the research that you had sent that you’re going to present right now. It looked fascinating. Why did you take us through Anu just to just to say the sense that you know making India is the biggest wealth creator for the last couple of years across across segments, right, Whether its the defense team or the railway theme for that matter, the CapEx thing. But the key question is whether the investors and analysts at large missed the whole bus. Let me just go to the wall and explain why I’m saying this. So the big question is, is FIS and the investor community at large missed the make in India bus. Now there’s been a big huge huge wealth creator for for a lot of investors in the last couple of years. So I was just I just came across some big interesting reports from larger fi fi brokerages in this last few days. You know number of put out a big report on defense this week, it’s 100 page report and they say that they see $140 billion opportunity in the defense sector in India over the next 10 years. So that’s a big opportunity in the defense side. The next big report which came from BofA Securities, they actually upgraded couple of industrial names like Simmons in ABV and they see a four $50 billion of CapEx that can come across to these to these companies over the next 8 to 10 years. So again a big number as far as big CapEx opportunity for these companies in India. The third was on on the railways. Morgan Stanley put out a big note on the railway this, this year, big revival in the railway CapEx and and they had actually initiated coverage on few companies as well. And similarly there was a big report maybe a maybe four weeks back from from Goldman Sachs on the power sector. They see a big opportunity even in the transmission space in India. So look at the stocks that I am focusing on number of put out a note on the on the defense sector and they put out a initiating report on both Hal as well as in Bel with the buy ratings. ABB and Siemens BofA actually upgrade the stocks to buy from neutral and they have now given in a multiple of close to 75 times on both these names. Similarly, Tittagar wagon, Morgan Stanley put out a note on the railways and this they had initiated coverage in the stuff with an overhead rating and a target price of another 25% upside from current levels. Similarly, Hitachi Goldman Sachs had put out a note with initiating report just a four weeks back and they see a huge potential upside for Hitachi as well even from current levels. But the key is look at the kind of performance these stocks have done. The wealth that these stocks have created in the last two and three years, Hindustan, Hindustan, RNDX, Hal. It is up eight times in last two years and instead of 15 times in the last three years. I am talking about 15 X returns in the last three years for Hal. Similarly for Bel, the stock is up already 12X in the last three years. ABB is up 9X, Siemens is up 6X in the last three years. Tittagar Wagon, There is an initiating report from Morgan, but that stock is already up 33 times in the last three years. Similarly Hitachi Energy where the stock has gone up 12 times in the last three years. So this has been a huge rally we have seen in these names and now we are seeing big reports as well. Having said that while everybody agrees to the big you know opportunity which is there a big total addressable market, but even in terms of valuations, we have seen a lot of catch up in these stocks as well. As far as valuations are concerned, Hindustan Aeronitisk is now trading at 40 times versus the 10 year, five year average of 20 times. Similarly Bel now trading at 40 times versus 10 year average of close to 30 times. ABB is now trading at close to 90 times on FI 25 earnings whereas the five year average has been 87 times. Similarly Siemens at 81 versus 10 year of five year of 71 and power Titagar is trading at now 45 times on FY25 price to earnings. So the key is while the addressable market could be quite large but we have already seen a huge rally in all these make in India companies whether it is defense, whether it is aerospace, all of stuff done really well. So the question is whether lot of investors and analysts miss the bus in terms of the make in inter theme. Rahul, you have been tracking defense and you have put out a note as well at Nirmal Bong. What’s your sense in like the likes of Bel and Hal at 40 times?