ICICI Securities maintained bullish stance on Solar Industries, Azad Engineering and Zen Technologies as key picks in defence as activity in the sector picks up in July.

What Happened: The brokerage gave a “buy” rating to all three stocks with a target price of ₹13,250 for Solar Industries, ₹2,450 for Azad Engineering and ₹2,000 for Zen Technologies. 

The research firm expects the thrust on defence spending to continue with a focus on higher Indigenous content. ICICI Securities pointed out that defence activity was strong in July with key developments, including budget spending, staying firm for the sector with more focus on aerospace.

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Budget 2024 earmarked ₹6.22 lakh crore for the defence sector, a 4.79% uptick from the previous year. 

The brokerage pointed to major developments for the sector that unfolded in July, including the Defence Acquisition Council (DAC) handing over an acceptance of necessity (AoN) to enhance the capabilities of the Indian Army and Coastal Guard, the Defence Ministry releasing the fifth indigenisation list covering 346 items and the DAC approving the scheduled refit of INS Vikramaditya aircraft carrier. 

Price Action: Defence stocks opened in the green on Tuesday as the rest of the markets bounced back from Monday's weakness. 

Shares of Solar Industries rose 1.89% to ₹10,520.

Shares of Azad Engineering rose was up 0.90% at ₹1,572.80.

Shares of Zen Technologies gained 2.32% to ₹1,677. 

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