HAL, BEL, Bharat Dynamics, other defence stocks gain as DAC approves projects worth ₹67,000 crore

Hindustan Aeronautics (HAL), Bharat Dynamics, Bharat Electronics (BEL), BEML, and other defence stocks traded higher on Wednesday after the government approved key military projects worth around ₹67,000 crore.

The Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh, approved various proposals aimed at boosting India's military capabilities, including procurement of long endurance drones, mountain radars and missile systems at a cost of around ₹67,000 crore.

For the Indian Army, Acceptance of Necessity (AoN) was accorded for the procurement of Thermal Imager-based Driver Night Sight for BMP. This would enhance night driving capability of BMP and provide higher mobility and operational advantage to the Mechanised Infantry, Ministry of Defence said in a release.

For the Indian Navy, AoN was accorded for the procurement of Compact Autonomous Surface Craft, BrahMos Fire Control System & Launchers and Upgradation of BARAK-1 Point Defence Missile System.

For the Indian Air Force, DAC approved the procurement of Mountain Radars and Upgradation of SAKSHAM/SPYDER Weapon System, it added.

AoN was also accorded for procurement of Medium Altitude Long Endurance (MALE) Remotely Piloted Aircraft (RPAs) for the three Services.

In addition, DAC has also accorded AoN for sustenance of C-17 and C-130J fleets and comprehensive annual maintenance contract of S-400 Long Range Air Defence Missile System.

Analysts believe defence stocks such as HAL, BEL, BDL, Solar Industries, Data Patterns (India), MIDHANI, among others may tend to benefit from the contracts.

“Defence companies likely to benefit from the ₹67,000 crore DAC clearance include Bharat Electronics Ltd (BEL) and Hindustan Aeronautics Ltd (HAL), given their strong alignment with the approved project domains such as radars, drones, and air defence systems. In the short term, markets are expected to respond positively to this news,” said Prashanth Tapse, Sr VP Research – Research Analyst at Mehta Equities.

However, in the long term, he believes the real value will hinge on timely execution and sustained government support to the domestic defence ecosystem.

Krishna Doshi, Defence Analyst at Ashika Institutional Equities believes that BDL, BEL, HAL, and Data Patterns are likely to be the key beneficiaries of the recent DAC approval.

“This development underscores the government’s continued commitment to strengthening domestic defence capabilities and provides enhanced long-term order book visibility for these companies. The announcement is also expected to offer some respite to defence stocks, which have been undergoing a period of correction,” Doshi said.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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