Defence Stocks in India: A Promising Sector
The Indian defence sector has been gaining traction in recent years, driven by the government’s efforts to promote domestic manufacturing and reduce dependence on imports. The Defence Acquisition Council’s (DAC) approval of capital procurement proposals worth Rs 79,000 crore has further boosted the sentiment for defence stocks in India.
Brokerage firm Antique has reiterated its positive stance on Indian defence stocks, maintaining a ‘Buy’ rating on key players including Mazagon Dock Ltd., Hindustan Aeronautics Ltd, Bharat Electronics Ltd., Bharat Dynamics Ltd., Zen Technologies Ltd., Solar Industries Ltd., and PTC Industries Ltd.
Defence Acquisition Procedure (DAP) 2020: A Boost to Domestic Manufacturing
The Defence Acquisition Procedure (DAP) 2020 has been a significant factor in promoting domestic manufacturing in the defence sector. The procedure aims to enhance the operational capabilities of the Indian Armed Forces while promoting indigenous production. The DAC’s approval of capital procurement proposals worth Rs 79,000 crore is a testament to the government’s commitment to domestic manufacturing.
In fiscal year 2026 so far, the DAC has accorded Acceptance of Necessity (AoN) for proposals worth approximately Rs 2,50,000 crore under various categories of capital procurement. This has already surpassed the FY25 approvals of Rs 2,20,000. The total share of domestic procurement has seen a phenomenal improvement from 54% in FY19 to 92% in FY25, indicating a significant shift towards indigenous production.
Key Defence Stocks to Watch
Antique has identified several key defence stocks that are likely to benefit from the government’s push for domestic manufacturing. These include Bharat Electronics Ltd., Hindustan Aeronautics Ltd, and Mazagon Dock Ltd.
The brokerage firm believes that the Landing Platform Docks (LPDs) could be the largest in terms of value, with contenders including Mazagon Dock Ltd., Cochin Shipyard Ltd, L&T Shipbuilding, and GRSE. Bharat Electronics Ltd. and Bharat Dynamics Ltd. can expect orders for ELINT System and Nag Missiles, respectively.
Investment Opportunities in Defence Stocks
The Indian defence sector offers significant investment opportunities, driven by the government’s push for domestic manufacturing and the increasing demand for defence equipment. Investors can consider investing in defence stocks, either directly or through mutual funds that focus on the defence sector.
However, it’s essential to conduct thorough research and analysis before investing in any stock. Investors should consider factors such as the company’s financial performance, management team, and competitive landscape before making an investment decision.
Conclusion
In conclusion, the Indian defence sector is a promising space for investors, driven by the government’s efforts to promote domestic manufacturing and reduce dependence on imports. Brokerage firm Antique has reiterated its positive stance on Indian defence stocks, maintaining a ‘Buy’ rating on key players. Investors can consider investing in defence stocks, either directly or through mutual funds, but should conduct thorough research and analysis before making an investment decision.
