India's defence industry stands at a critical crossroads where robust growth prospects meet elevated stock valuations. Kotak Institutional Equities has issued a comprehensive sector analysis identifying clear winners and underperformers among major defence companies. While the long-term outlook remains positive, investors must carefully evaluate current pricing levels. The analysis highlights strategic opportunities in aerospace and emerging technologies like unmanned systems, while questioning sustainability of valuations for several mid-cap defence manufacturers in the competitive landscape.

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