defense share
After getting approval for defense deals worth about Rs 52 thousand crores, there is a tremendous rise in defense stocks. In fact, the necessary approval (AON) has been received by the Defense Acquisition Council (DAC) for a capital acquisition proposal worth approximately Rs 52,000 crore. In the morning, Paras Defense and Space Technologies jumped 4.68 per cent to Rs 1,354.60, Bharat Electronics (BEL) rose 2.14 per cent to Rs 427, Mazagon Dock Shipbuilders rose 1.08 per cent to Rs 2,571, while Hindustan Aeronautics (HAL) rose 0.82 per cent to Rs 4,465.10. Nifty India Defense Index was trading 1.35 percent higher at 9,703.75.
BHEL may get benefit
JM Financial Institutional Securities reiterated its ‘Buy’ rating on Bharat Heavy Electricals (BHEL). The brokerage said the government’s decision to allow four Chinese power equipment companies to participate in PSU tenders for high-voltage transformers and gas-insulated switchgear (GIS) “will have limited impact on BHEL. DAC approval has been received for the electric propulsion system, the tender of which is likely to go to BHEL. JM Financial expects BHEL in the June quarter,” the brokerage said. It will report revenues of Rs 66 billion, up 20 per cent year-on-year, with EBITDA margins at “minimal 1.9 per cent” and return to profitability in the first quarter after reporting losses in the last eight years. The brokerage estimates BHEL’s revenue, EBITDA and PAT to grow at a CAGR of 21 per cent, 57 per cent and 71 per cent, respectively, during FY2026 to 2028. Will increase.
What things were approved for?
This rise in the stock market has come after the DAC’s approval of procurement proposals aimed at strengthening the operational capabilities of the Indian Armed Forces. The council is the highest decision-making body for defense purchases in the country. The approvals include a chain of local weapons systems and platforms, including Akash Tarang anti-drone electronic warfare system, Man-Portable Anti-Tank Guided Missile (MPATGM), Medium Range Surface to Air Missile (MRSAM) system, Very Short Range Air Defense System (V-SHORADS), Active Protection System (APS) for tanks etc.
Now approval will go in the second phase
For the Indian Navy, the DAC also approved proposals for setting up multiple-effect land mines, naval ship-based unmanned aerial systems (UAS) and a land-based test facility. Bharat Electronics (BEL), Hindustan Aeronautics Limited (HAL), and BHEL may emerge as major beneficiaries of the recent Defense Acquisition Council (DAC) approval of Rs 52,000 crore. The Defense Acquisition Council (DAC) has approved defense acquisition proposals worth about Rs 52,000 crore to strengthen the operational capabilities of the Indian Army, Navy and Air Force. Once Acceptance of Requirement (AON) is granted, the next phase involves tender, technical valuation and commercial negotiations before award of contract. AON is the first phase of the government’s in-principle approval and acquisition process.
