Look at Bharat Electronics, Cochin Shipyard: Prasanth Prabhakaran

Prasanth Prabhakaran, Sr President & CEO, YES Securities told CNBC-TV18, "We have actually moved away from the headline indices. We have been telling our clients to not look at it because valuations look too expensive on that side. However, research has initiated coverage in the defence sector. Two stocks that have been picked and are hold for long term for us – one is Bharat Electronics (BEL) which is there and the second one is Cochin Shipyard, both stories link to the fact that there will be a focus and an investment that will go into building the Make in India theme for the defence sector."

"There are still regulations to be loosened out to make that fully possible but we are willing to take that bet and go ahead with it. BEL has a Rs 40000 crore book and the book to bill is around 4.5x. I think it is a good story to have in the long run. We expect a 17 percent CAGR growth in the stock for the next two years."

"Similarly Cochin Shipyard – an Rs 8000 crore book that has got executed and Rs 5000 crore book that has already been picked up for the next two years. It will practically do 70 percent of what they have done till now as a firm for the last four years plus. Both are good stocks to have in the long term portfolio and we are very bullish on the defence sector side because the valuations still look reasonable in that side," he added.