Current defense sector mania is very similar to infra mania in 2000’s, basically same wine in a different bottle. Low free float in PSU defense stocks is a cherry on top and adding further fuel to the rally. Marketcap/sales ratio of PSU shipbuilding stocks is obnoxious, even higher than high ROE, sustainable growth sectors like IT, FMCG.

Management of Mazagoan, GRSE have mentioned in concalls that they are likely to see peak revenues in FY25 or FY26 and they see 20-25%CAGR revenue from FY24-FY26. This shows that current order book size while large, the execution will happen over a period of years and peak growth is more than factored in current valuations.

Like infra, defense is also cyclical. Apart from may be HAL, Midhani, BEL, its important to note that R&D spend, IP of Indian defense stocks is nothing to boast about. In case of most companies, most of the technology is insourced from Indian entitities like DRDO, or some foreign entity.

Hi! Is it possible to apply parameters on stocks of a particular index? e.g. Nifty 500 or BSE A stocks?

Renewable Energy finds a new Suitor-Booming Data Centers,AI

You would be wondering what renewable energy has to do with data center & AI.
The answer is yes – the Global mandate is that data centers has to run on Green energy ! intersting indeed ? But why ? can it not run on normal electricity produced by Coal ? yes it can, but there is a hitch here.!

The demand for Data centers is increasing day by day, due to the ever increasing demand for data storage , thanks to boom in AI.

Data centers are energy intensive as it needs a lot of power for cooling and ventilation apart from running the servers. Normally we use electric energy for productive purpose such as operating factories , machinery , for cooking food , operating Home appliances, driving a vehicle (EV) or a train (electric)… But if electric energy is to be used to cool data centers, it is seen as energy wastage – but a necessity devil.

Due to the data center boom &:AI, It is estimated that there is an incremental energy demand which currently stands at 3% of total energy production at Global level which is set to increase to 8% by 2030.
Already , the world is fighting with Global warming / climate change with all out efforts in decarbonising by getting rid of fossil fuels and resorting to renewable energy.

So it makes sense that the ever increasing data center boom which demands additional energy requirement should run sustainably with renewable energy and the global mandate is very clear- so the demand for more sustainable renewable energy further increasing.

India is said to be the land for cheaper sources of renewable energy and building data centers in India is less by 30-40% than elsewhere in the world and hence the world is looking up to India for data centers.

https://law.asia/india-data-centre-infrastructures/

To add to above, if i remember correctly in one of the concall they did mention that client retention is 99% or above and the ones lost is also generally those who wind up their operations in India and permanently move abroad.

Investor Presentation