Deven Choksey's outlook on defence sector; shares top auto ancillary & OEM stock picks
The market veteran highlighted earnings prospects, valuation concerns in defence counters and stock preferences within the auto and ancillary space.
- Dec 31, 2025,
- Updated Dec 31, 2025 4:35 PM IST
Deven Choksey, Managing Director at DRChoksey FinServ Pvt, shared his outlook on the defence and automobile segments during an interaction with Business Today on Wednesday. The market veteran highlighted earnings prospects, valuation concerns in defence counters and stock preferences within the auto and ancillary space.
Speaking on the defence sector, Choksey said companies are likely to post stronger numbers over the next financial year. "I think defence companies will have higher earnings to talk about in the 2026-27 financial year (FY27). We are very clear on this particular understanding that we can. But the higher earnings would be, I think, 15-20 per cent kind of a growth. In some cases, it might be slightly higher, but I think about 15-20 per cent kind of a growth in general that we are seeing."
He pointed out concerns related to valuations, suggesting that current market prices may not justify investment at elevated levels. "On one side, your business is growing at 15-20 per cent earnings growth. On the other side, your valuations are already higher. I don't think that justifies the investment. And that is where I probably think I would like to be a little bit more careful about adding any stock into the portfolio," he noted.
Adding that earnings visibility remains strong, the expert said, "We carefully watch if any price correction, meaningful price correction comes, yes, I think we will buy. Because the visibility of earnings remains extremely high due to the normal spending in the defence sector. So we are mindful of this situation."
On the automobile sector, he stated that Original Equipment Manufacturers (OEMs) are expected to continue performing well, with Mahindra & Mahindra Ltd (M&M) emerging as a strong player. "I think OEMs continue to do well and I think no doubt that M&M has been the winner of all the launches." He added that the company has gained with differentiated product offerings and advance booking strength. He believes corrections could present a buying opportunity.
Choksey also named Bajaj Auto as another preferred OEM due to electric and premium motorcycle expansion and wider export presence. On ancillaries, he said they offer better prospects. "More than the OEMs, maybe, I think, my confidence level is also very high in the ancillary companies. UNO Minda Ltd and Minda Corporation Ltd remain relatively more sure-shot bets from the investment point of view."
Deven Choksey, Managing Director at DRChoksey FinServ Pvt, shared his outlook on the defence and automobile segments during an interaction with Business Today on Wednesday. The market veteran highlighted earnings prospects, valuation concerns in defence counters and stock preferences within the auto and ancillary space.
Speaking on the defence sector, Choksey said companies are likely to post stronger numbers over the next financial year. "I think defence companies will have higher earnings to talk about in the 2026-27 financial year (FY27). We are very clear on this particular understanding that we can. But the higher earnings would be, I think, 15-20 per cent kind of a growth. In some cases, it might be slightly higher, but I think about 15-20 per cent kind of a growth in general that we are seeing."
He pointed out concerns related to valuations, suggesting that current market prices may not justify investment at elevated levels. "On one side, your business is growing at 15-20 per cent earnings growth. On the other side, your valuations are already higher. I don't think that justifies the investment. And that is where I probably think I would like to be a little bit more careful about adding any stock into the portfolio," he noted.
Adding that earnings visibility remains strong, the expert said, "We carefully watch if any price correction, meaningful price correction comes, yes, I think we will buy. Because the visibility of earnings remains extremely high due to the normal spending in the defence sector. So we are mindful of this situation."
On the automobile sector, he stated that Original Equipment Manufacturers (OEMs) are expected to continue performing well, with Mahindra & Mahindra Ltd (M&M) emerging as a strong player. "I think OEMs continue to do well and I think no doubt that M&M has been the winner of all the launches." He added that the company has gained with differentiated product offerings and advance booking strength. He believes corrections could present a buying opportunity.
Choksey also named Bajaj Auto as another preferred OEM due to electric and premium motorcycle expansion and wider export presence. On ancillaries, he said they offer better prospects. "More than the OEMs, maybe, I think, my confidence level is also very high in the ancillary companies. UNO Minda Ltd and Minda Corporation Ltd remain relatively more sure-shot bets from the investment point of view."