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New Delhi: Indian defence stocks saw a robust, sector-wide rally on July 6 as the markets reacted to the Defence Acqusition Council’s (DAC) approvals for fresh military procurement. Chaired by Union Defence Minister Rajnath Singh, the DAC greenlit ₹52,000 crore of equipment for the Indian Army, Navy and Air Force.
This includes anti-UAV electronic warfare systems , man-portable anti-tank guided missile systems, medium-range surface-to-air missile systems and various air defence and protection ssyems for the Army. The Air Force secured clearnace for a fixed-wing high-altitude platform for surveillance, telecommunications and remote sensing. The Navy received multi-influence ground mines, ship-bound unmanned aerial systems, and land-based testing facilities for electric propulsion.
Following the news, Zen Technologies surged 6%, Dynamatic Technologies surged 6%, while Paras Defence and Space Technologies surged more than 4%, given that these companies are expected to benefit from the tenders issued. The overall Nifty Defence index, too, rose 1.5% in early morning trades.
These approvals come at a time when the DAC has so far approved almost Rs.6.73 lakh corre across 55 proposals, nearly quardupling the annual defence capital investment of Rs.1.8 lakh crores. With the high potential in the defence business, the Nifty Defence Index has gained over 20% on a year to year basies through May, far outpacing the Nifty 50. The sector has gained by a combination of large order inflows, record defence production and the government’s push towards indigenous manufacturing under the ‘Make In India ‘ framework.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in stocks includes financial risks, and past performance is not indicative of future results. Readers should conduct their own research or consult with a qualified financial advisor before making any investment decisions.
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