Bharat Dynamics, Paras Defence, HAL stocks surge after Defence Acquisition Council clears proposals worth Rs 76390 cr
Amid rising demand for indigenisation, the defence sector outlook is seen as positive, domestic brokerage house ICICI Securities noted in its report while citing the triggers around the sector.
Shares of defence companies surged by as much as 4.5 per cent intraday on Tuesday on the BSE, aided by news of capital acquisition proposals worth Rs 76,390 crore getting cleared on Monday by the Defence Acquisition Council (DAC). This was despite unfavourable a third straight trading session.
Bharat Dynamics surged most by nearly 4.5 per cent occupying the top position followed by Garden Reach Shipbuilders and Paras Defence and Space Technologies, which were up over 4 per cent. While Paras Defence and Space Technologies gained around 4 per cent, Hindustan Aeronautics Limited (HAL) and Astra Microwave were up 3 per cent each around the same time.
Similarly, Bharat Electronics, Mishra Dhatu Nigam, Mazagaon Dock Shipbuilders each surged almost 2 per cent and Solar Industries up over 1 per cent on the BSE intraday.
On the Atmanirbhar theme, Defence Acquisition Council (DAC), in a meeting chaired by Defence Minister Rajnath Singh on Monday accorded Acceptance of Necessity (AoN) for Capital Acquisition Proposals of the Armed Forces amounting to Rs 76,390 crore under ‘Buy (Indian)’, ‘Buy & Make (Indian)’ and ‘Buy (Indian-IDDM)’ categories, the ministry said in a statement.
This will provide a substantial boost to the Indian Defence Industry and reduce foreign spending significantly, the ministry further said in its release.
Amid rising demand for indigenisation, the defence sector outlook is seen as positive, domestic brokerage house ICICI Securities noted in its report while citing the triggers around the sector. The brokerage sees an upside of around 39 per cent in the defence sector stocks from current levels.
Among favourite picks, the brokerage picks Hindustan Aeronautics, Mishra Dhatu Nigam, Mazagaon Dock and Astra Microwave. It sets a price target of Rs 2618, Rs 274, Rs 330 and Rs 250 per share, respectively with an upside of between 11 to 39 per cent.
Navy and Airforce have seen 2x increase in indigenous procurement over FY15-21 and have been instrumental in allowing the Defence Ministry to set a 68 per cent indigenous target for capital procurement in FY23E, ICICI Securities said.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.