Major Procurement Drive Underway
The Indian Defence Acquisition Council (DAC) has given in-principle approval to capital acquisition proposals valued at an estimated ₹2.12 lakh crore. This substantial push is expected to significantly bolster India's indigenous defence manufacturing capabilities, with leading companies like Hindustan Aeronautics Ltd (HAL) and BEML Ltd identified as key potential beneficiaries.
According to Antique Stock Broking, the defence sector is poised for a robust ordering momentum. This development aligns with the government's strategic focus on strengthening domestic defence production and reducing reliance on foreign imports.
Key Acquisitions for Army and Air Force
The approved procurement proposals cover a wide array of critical equipment for both the Indian Army and Air Force. For the Army, acquisitions include:
- High Mobility Vehicles (HMVs)
- Self-Propelled Tracked Gun Systems
- Gun Shot Response Systems (GSRS)
- Light Multi Role Helicopters (LMRH)
- Very Short-Range Air Defence Systems (VSHORADS)
- Platform Based Counter Unmanned Aerial Systems (C-UAS)
- Surveillance UAVs
- Integrated Surveillance and Strike Systems
- Long-Range Kamikaze Drone Systems
The Indian Air Force will see enhancements to its air defence and war-fighting capabilities through the procurement of new helicopters, advanced air defence systems, modern weaponry, and Mobile X-Band Doppler Weather Radar Systems.
Anticipated Beneficiaries and Upcoming Orders
Several marquee defence orders are expected to be placed in the near term, with specific companies positioned to secure these lucrative contracts:
- Mazagon Dock Shipbuilders Ltd (MDL): Expected to lead the P75I submarine programme, estimated at ₹90,000 crore.
- Bharat Electronics Ltd (BEL): Anticipated to receive orders for Quick Reaction Surface-to-Air Missile (QRSAM) systems (₹30,000 crore) and is also targeting contracts for Combat Management Systems (CMS) and radars.
- Garden Reach Shipbuilders & Engineers Ltd (GRSE): Poised to benefit from the Next-Generation Corvette (NGC) programme, valued at ₹33,000 crore.
Bharat Dynamics Ltd (BDL) is also likely to secure significant missile supply contracts, estimated between ₹10,000-12,000 crore, for the QRSAM programme. The execution of these large-scale projects is expected to create substantial opportunities for ancillary defence companies as well, boosting revenue visibility across the sector over the medium term.
Long-Term Growth for Indigenous Defence
Analysts maintain a constructive outlook on the Indian defence sector, citing a multi-year structural upcycle. This growth is underpinned by steady increases in budgeted capital expenditure, a rising number of Acceptance of Necessity (AoN) approvals, and the government's unwavering commitment to indigenization.
Antique Stock Broking has reiterated its 'Buy' ratings on key defence stocks, including HAL, BEL, Solar Industries India Ltd, Astra Microwave Products Ltd, and Krishna Defence and Allied Industries. However, they emphasize that a faster conversion of AoNs into firm contracts remains crucial for translating the considerable procurement pipeline into sustained revenue and order-book growth for these companies.