9 Defence Stocks Likely to Benefit After Govt Clears ₹2.12 Lakh Crore in Defence Procurements
The Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh, has cleared capital acquisition proposals worth about Rs. 2.12 lakh crore for the Indian Armed Forces, marking a significant step toward strengthening India’s defence preparedness and modernisation.
The approvals cover various defence systems and platforms for the Army, Navy and Air Force. These acquisitions aim to enhance operational readiness, surveillance capabilities and combat effectiveness while supporting the modernisation of India’s armed forces.
Also Read: Sensex & Nifty 50 | Stock Market Live Updates Today: Markets Open Mixed Nifty Down 0.08%, IT Falls 1.36%; Pharma Gains 1.31%
Nearly 82% of Procurement to Come From Indian Industry
As per the Ministry of Defence, more than 82 percent of the approved procurements will come from Indian industry, thereby emphasizing the importance being given to domestic production and participation of Indian firms in the manufacture of defence equipment.
The move will help India's military equipment manufacturing ecosystem and contribute towards the preparedness of the country's defence forces, while also creating an opportunity for Indian firms that manufacture military equipment for the army.
Indian Army to Receive Advanced Systems and Drones
The Indian Army’s approved procurements include High Mobility Vehicles, Self-Propelled Tracked Gun Systems, Light Multi-Role Helicopters, Very Short-Range Air Defence Systems, Surveillance UAVs and advanced drone systems.
Such acquisitions will enhance the mobility, logistics, firepower, and surveillance abilities of the Army. These will also be helpful in enhancing target identification and effectiveness in operations, especially when the terrain is tough.
Also Read: VA Tech Wabag bags mega order worth over ₹1,000 Cr from Reliance Industries for Jamnagar desalination plant
Navy and Air Force to Strengthen Defence Capabilities
For the Indian Navy, the Defence Acquisition Council approved the procurement of Active Offboard Decoy Systems and other major naval platforms to strengthen maritime defence capabilities.
These technologies are expected to increase protection against sophisticated anti-ship missile systems and enable faster responses to new challenges the Navy may face.
Air Defence and Weather Surveillance to Improve
In the case of the Indian Air Force, the approvals will be for helicopters, air defense equipment, weapons, and the Mobile X-Band Doppler Weather Radar System. The Special Utility Helicopters will take care of the need for air transport, while the Doppler radar systems will offer weather surveillance in the forward operating areas.
Stocks that could benefit from the defence procurement push
Helicopters: Hindustan Aeronautics Limited (HAL) manufactures helicopters for the Indian Armed Forces and could benefit from future procurement opportunities related to military helicopter requirements.
Radar and Air Defence Electronics: As BEL and Astra Microwave Products are involved in the production of defence electronics and radar systems, they can take advantage of the Indian defense modernization initiatives.
Military Vehicles: BEML is engaged in the production of high-mobility military vehicles along with other defense-related products. This company might gain from procurement opportunities that involve making the Indian Army mobile.
Counter-Drone Systems: Zen Technologies offers anti-drone systems and defense training solutions. Zen Technologies’ competencies are well-suited to the increasing demands for counter-drone technologies that can tackle any aerial threat.
Also Read: Paramount Communications Q2: net profit surging 83% YoY to ₹24.24 Cr as revenue crosses ₹560 Cr
Missiles and Air Defence Weapons: Bharat Dynamics Limited (BDL) manufactures guided missiles and other defence weapon systems. The company could benefit from future procurement opportunities involving missile systems and air defence capabilities.
Naval Platforms: Mazagon Dock Shipbuilders and Garden Reach Shipbuilders and Engineers (GRSE) manufacture warships and naval vessels. Both entities would have a chance to capitalize on any future upgrades in naval capability and defence at sea.