Indian Defence Stocks Rally as DAC Approves ₹67,000 Crore Proposals

Shares of major defence companies, including Bharat Electronics (BEL), Bharat Dynamics (BDL), and Solar Industries, gained up to 1.5% on Wednesday after the Defence Acquisition Council (DAC) cleared proposals worth ₹67,000 crore for the Indian Army, Navy, and Air Force.

The approvals, granted on Tuesday (Aug 5), are expected to give a major boost to India’s defence manufacturing sector. Proposals range from autonomous surface craft to night-vision systems and air defence upgrades.

📌 Key Proposals and Beneficiaries

For the Indian Army

• Acquisition of Thermal Imager-Based Driver Night Sight for infantry fighting vehicles.

→ Likely beneficiaries: Bharat Electronics (BEL), which already supplies thermal imaging sights for BMP combat vehicles and T-72 tanks.

For the Indian Navy

• Procurement of Compact Autonomous Surface Craft — may benefit Sagar Defence.

• BrahMos Fire Control Systems and Launchers — potential gains for Larsen & Toubro (L&T) and Godrej Aerospace.

• BARAK-1 Point Defence Missile System Upgrade — could benefit BEL, BDL, and Adani Defence.

For the Indian Air Force

• Mountain Radar Procurement — BEL and Astra Microwave stand to gain.

• Upgrades to SAKSHAM and SPYDER Weapon Systems for integration with the Integrated Air Command and Control System (IACCS) — a boost for BEL.

• Acquisition of Medium Altitude Long Endurance (MALE) drones — likely beneficiaries include Adani Defence, Tata Advanced Systems, BEL, Hindustan Aeronautics (HAL), and L&T.

• Maintenance of S-400 Air Defence System — may support BEL, Bharat Dynamics, and select private players.

📉 Market Context

Despite the approvals, the Nifty India Defence Index has dropped 11% in the past month, with BEL down 8% and Bharat Dynamics slipping 18%. Analysts believe the DAC’s massive clearance could reverse the recent downtrend by reviving investor confidence in defence stocks.