Shares of defence conglomerates such as Mazagon Dock, Garden Reach Shipbuilders, and Cochin Shipyards rallied by 10% on 20th September. This breakthrough came after nearly two months of profit-booking.

Today, the shares of Paras Defence and Bharat Electronics rose by around 2%, while Hindustan Aeronautics gained 2.5% by 11 AM. Bharat Dynamics jumped 4% to Rs 1,166, and both Mazagon Dock and Garden Reach Shipbuilders surged 8%.

Cochin Shipyard shares surged 10% on 20th September. The stock will trade ex-dividend from 23rd September, making today the last day for investors to purchase it in order to be eligible for the dividend payout.

Cochin Shipyard is also set to receive inflows of $30 million after being included in the FTSE All-World index. The rebalancing will occur in the final minutes of trading on 20th September.

Over the past two months, PSU defence stocks have experienced significant profit-taking. After rallying over 100% in the past year, stocks like Mazagon Dock, Cochin Shipyard, and Garden Reach Shipbuilders have fallen more than 40% from their lifetime highs as investors booked profits due to stretched valuations impacting the risk-reward ratio.

On 4th September, the Defence Acquisition Council (DAC) approved major procurements worth Rs 1,44,716 crore for the Armed Forces. The approved projects include Future Ready Combat Vehicles (FRCVs), Air Defence Fire Control Radars for the Army, and Dornier 228 aircraft, along with Next Generation Fast Patrol Vessels and Offshore Patrol Vessels for the Indian Coast Guard.

At 12:02 PM, the shares of Mazagon Dock were trading 6.86% higher at Rs 4,338.25 on NSE.

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