Jai Hind, Jai Jawan, Maa Tuje Salaam – HDFC Defence Fund – Final Part

जय हिंद – जय जवान, भारत माँ तुझे सलाम I
You’re a good soldier, choosing your battles
Pick yourself up and dust yourself off, get back in the saddle
You’re on the frontline, everyone’s watching
You know it’s serious, we’re getting closer, this isn’t over
The pressure’s on, you feel it
But you got it all, believe it
When you fall get up, oh, oh
And if you fall get up, eh, eh
Tsamina mina zangalewa ’cause this is India
Tsamina mina, eh, eh
Waka waka, eh, eh
Where Do You Come From?
This time for Indian Armed Forces.

Shakira sung this Waka waka for Africa’s Football World Cup. I am penning this to you for a different ball game – HDFC Defence Fund. “Sharper you become, the better an advisor you will be” – this is what I tell my team. Going by the same theory in this final and most important write-up my focus is on the profitability of this “Evergreen Sector” by far.

At the outset allow me and my team to thank you all for your incredible response to our messages on HDFC Defence Fund. I hope and pray that this asset in your arsenal does not go dud. You may share my thoughts with friends and family who need Trackfinder’s expertise in Financial Advisory Services. Always here to help everyone.

The Defence Ecosystem
In the past 6 decades, Indian companies with the help of top-notch international partners have meticulously created a system for manufacturing a wide range of equipment and platforms for the Indian Armed Forces. This collaboration has contributed to the indigenization efforts by developing advanced technology, manufacturing defence systems, and supporting the growth of the defence manufacturing ecosystem in India. The defence sector in India has witnessed significant growth and development over the last 10 years. Especially after the Kargil and Galwan Valley fiascos, Govt of India has given more emphasis on the readiness of the Tri-Service along the lines of the “Two and Half War” doctrine. There are 6 pointers to invest your faith in this.

1. Increased Defence Budget,
2. Indigenous Manufacturing
3. Defence Procurement Reforms
4. Technology and Innovation
5. Strategic Partnerships
6. Defence Exports

These factors, among others, have contributed to the growth and development of the defence sector in India over the last decade. To be honest, there is plenty of inherent value to these 6 aspects than being mere fancy words.

Credibility Focus.
I, as an investor and investment advisor place this Nifty India Defence Index TRI-based fund in the category of an Evergreen Sector. I shall explain my logic, you can be the Judge.
World over, I have seen the Defence Budgetary Allocation kept the same or increased year on year even when the country is in an Economic Slowdown, Recession, Ethnic Violence, Natural Disasters, Political Instability, or even during a time of Pandemic. This phenomenon of overlooking the country’s internal health to keep the Armed Forces in its readiness is because of external threats. Like India’s two-and-a-half war. This sector can’t bleed because come what may, we would protect our borders and our sovereignty with tooth and nail.

Focus on Future Profitability
The profitability of the sector as well as the fund can be influenced by factors like government policies, defence budget allocations, and global geopolitical dynamics. I do not see any de-escalation in building up a strong force to defend Bharat.

a) India’s capex in Defence has grown at a CAGR of 9% over the past decade
b) Import substitution has resulted in imports declining sharply leading to 18% raise in indigenous procurements.
c) India’s defence exports growth increased 8X over 8 years but is still at a low share of global defence trade
d) Growth of the defence vendor ecosystem is aiding higher value capture within the country. This has helped in the emergence of private companies, which are investing in technology with high growth potential. Private Cos has grown by 14% and the PSU’s CAGR is 8%.

1. Bharat Electronics Limited
2. Hindustan Aeronautics Limited
3. Bharat Dynamics Limited
4. Garden Reach Shipbuilders & Engineers Ltd
5. Mazagon Dock Shipbuilders Limited
6. Goa Shipyard Limited
7. Bharat Forge Limited
8. Larsen & Toubro Limited
9. Tata Advanced Systems Limited
10. Reliance Naval and Engineering Limited
11. Mahindra Defence Systems
12 Ordnance Factory Board
13. Ashok Leyland Defence Systems

If you understand the value of the above 13 companies, you need to hold your breath while I list the growing number of countries that are importing Indian Arms and Ammunition. That is more than 30 countries.

Afghanistan, Bangladesh, Bhutan, Egypt, Indonesia, Iraq, Israel, Jordan, Malaysia, Myanmar, Nepal, Oman, Philippines, Qatar, Saudi Arabia, Sri Lanka, United Arab Emirates (UAE), United Kingdom, Vietnam, Maldives, Mauritius, Nigeria, Uganda, Botswana, Zambia, Namibia, Kenya, Chile, Seychelles, and many other European Nations

India is slowly becoming a major exporter in the field of Arms, Ammunition, Defence Equipment, Missiles, and Satellites in the world. This is just the beginning of the growth of these unique companies. These companies actively participate in our campaign of Make In India, Making Indian Armed Forces Strong and India Stronger.

Thus, with this Fund, you become a proud co-author of the Indian Growth Story.
Bet on it, Bet it Long, and Keep Betting. To Invest with Trackfinder:
Call +91 77770 97212, +91 74004 06212, +91 7400404212

Warm Regards
Antony Trackfinder

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