Bharat Dynamics, HAL, BEML to Cochin Shipyard: Defence stocks surge on govt’s ₹1.05 lakh crore procurement drive

Defence stocks such as Paras Defence, BEML, Hindustan Aeronautics, Bharat Electronics, and others rallied on Friday after the government approved acquisition of ₹1.05 lakh crore worth of new defence equipment. The gains in defence stocks lifted the Nifty Defence India index by 1.4%.

Paras Defence and Space Technologies emerged as the top gainer among index constituents, surging 8%. Other gainers included Mishra Dhatu Nigam, Astra Microwave Products, BEML, Unimech Aerospace and Manufacturing, Cochin Shipyard, Bharat Dynamics, Garden Reach Shipbuilders & Engineers, Mazagon Dock Shipbuilders and BEL, all of which rose between 1-2% each.

The Ministry of Defence’s Defence Acquisition Council (DAC) on Thursday cleared capital acquisition proposals worth nearly ₹1.05 lakh crore. The 10 capital acquisition proposals are set to be carried out through indigenous sourcing from Indian companies.

The Acceptance of Necessity (AoN) is for defence equipment like the procurement of Armoured Recovery Vehicles, an Electronic Warfare System, an Integrated Common Inventory Management System for the Tri-Services, and Surface-to-Air Missiles for the Indian Army, Navy, and Air Force.

Defence stocks have been on a sharp upward trajectory, driven by the government’s strategic focus on enhancing self-reliance in defence manufacturing and fostering domestic innovation.

“With strong structural tailwinds — including increased recognition of India’s defence capabilities following recent geopolitical developments, rising global demand for defence exports, NATO’s enhanced defence spending, Europe’s rearmament plans, and the Indian government’s ongoing push for indigenization — we maintain a positive outlook on the Indian defence sector,” said Krishna Doshi, Research Analyst at Ashika Institutional Equities

Defence stocks likely to benefit

Doshi highlighted several companies that are well-positioned to benefit from the government’s latest defence procurement approvals worth ₹1.05 lakh crore. These include:

Bharat Dynamics – A key player in missile manufacturing

Bharat Electronics – A leader in radar systems and electronic warfare

Cochin Shipyard – Expected to benefit from orders for underwater and autonomous vessels

Mazagon Dock Shipbuilders – Active in building destroyers and mine countermeasure vessels

Garden Reach Shipbuilders & Engineers – Likely to gain from patrol vessel contracts

Other potential beneficiaries, according to Doshi, include Paras Defence & Space Technologies, Data Patterns, and Astra Microwave Products, which are positioned to tap into various niche opportunities within India’s evolving defence ecosystem.

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