Chandrayaan-3 paves the way for a megatrend in space stocks

India’s pioneering achievement in Chandrayaan-3’s successful lunar landing at the southern pole establishes it as the first nation to attain this distinction. ISRO is “The Mastermind” behind the success. It has demonstrated India’s robust space research capabilities and dynamic technological growth to the world. That’s not all, it has also paved the way for a mega trend in space stocks.

There are several missions lined up after Chandrayan 3:

Gaganyaan: Envisages to send humans in a spaceflight for 3 days and bring them back safely.

Aditya L1: Mission to launch a spacecraft for the study of the Sun, which provides details of solar activities and their effect on space weather in real-time.

XPoSat: 1st dedicated X-ray Polarimeter Satellite, to study various dynamics of bright astronomical X-ray sources in extreme conditions.

NISAR: An observatory being jointly developed by ISRO & NASA.

Each of these missions will require several components and services from the corporate sector leading to increased revenues for them.In 2020, the Indian Space Sector stood at $9.6 billion, making up 2%-3% of the global space economy. Projections indicate growth to $13 billion by 2025. A growing pie will help all the players in the industry.

There are second and third-order changes to ISRO’s Chandrayan success, which not many people are talking about.

The commercial wing is called New Space India Ltd (NSIL), whose business activity includes manufacturing The Polar Satellite Launch Vehicle (PSLV), and Small Satellite Launch Vehicle (SSLV), and provides launch services to countries and private corporations.

NSIL started operations in FY 2019-20. In a short span of three years, NSIL clocked a revenue of Rs 1,674 crore and profit after tax (PAT) of Rs 342 crore for the year ending 31 March 2022. In the previous financial year, it clocked a revenue of Rs 513 cr and a PAT of Rs 158 cr. This marks a remarkable growth of over 200% in a year. (Data Source: Annual Report).

As ISRO’s lunar achievements gain prominence, NSIL’s business prospects may also see an upswing, leveraging its association with ISRO’s successes. But NSIL won’t be alone in this, there are several allied industries and companies that will gain prominence and become bigger in the years to come.

According to government data, startups in the space ecosystem rose from just 1 in 2012 to 101 by 2021. We will see many more startups cropping up in the space ecosystem following the success of Chandrayan 3. The government is also focusing on the inclusion of private players in space missions. This has spurred Indian conglomerates and startups to explore space ventures, capitalizing on future growth potential.

The newly emerging Indian space sector is a noteworthy addition to the business landscape, which will be a megatrend that investors should keenly observe for future wealth creation opportunities.

Technical Outlook

Nifty opened with a gap down below the crucial support of 19,300. Bulls’ attempt to pull the index above 19,300 went in vain and the index slid lower and finally closed at 19,265 down by 120 points.

Nifty closing the week below the support level of 19,300 suggests that bears are like to have an upper hand going into the monthly expiry next week. If 19,300 is not crossed, there is a high probability of bears pushing the index closer to 18,800-19,000 levels. These levels will act as very strong support for the markets as they worked as previous high resistance earlier.