Defence Stocks in Focus: Antique Bullish on BEL, HAL, and Others
Brokerage firm Antique has reiterated its positive stance on Indian defence stocks following the Defence Acquisition Council’s (DAC) approval of capital procurement proposals worth Rs 79,000 crore. The approvals, aimed at enhancing the operational capabilities of the Indian Navy and Air Force, are part of a broader push under the Defence Acquisition Procedure (DAP) 2020 to promote domestic manufacturing.
Antique maintains 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 Council Approvals
In fiscal year 2026 so far, DAC has accorded Acceptance of Necessity (AoN) for proposals worth approximately Rs 2,50,000 crore under various categories of capital procurement. “Thus, it 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,” Antique said.
DAC has approved proposals to enhance operational capabilities of the Indian Navy and the Air Force. These include procurement of Landing Platform Dock, Advanced Light Weight Torpedoes, Collaborative Long Range Target Saturation/ Destruction System, Nag Missile System (Tracked) Mk-II; and Ground Based Mobile ELINT System.
Key Players and Orders
“In our view, the LPDs could be the largest in terms of value and the contenders for this order could be MDL, CSL, L&T Shipbuilding, and GRSE. BEL and BDL can expect orders for ELINT System and Mag Missiles, respectively,” the brokerage said in its note.
Investment Opportunities in Defence Stocks
With the Indian government’s push for domestic manufacturing and the defence sector’s growth potential, investors are looking for opportunities to invest in defence stocks. The defence sector has seen significant growth in recent years, driven by the government’s efforts to modernize the armed forces and promote indigenous manufacturing.
Investors can consider investing in defence stocks through various routes, including equity investing, mutual funds, and exchange-traded funds. However, it is essential to conduct thorough research and analysis before making any investment decisions.
Risk Factors and Challenges
While the defence sector offers growth opportunities, it is not without risks and challenges. The sector is heavily dependent on government orders and policies, which can be subject to change. Additionally, the sector is highly competitive, with several players vying for contracts and orders.
Investors should also be aware of the regulatory framework governing the defence sector, including the Defence Acquisition Procedure (DAP) 2020. The DAP 2020 aims to promote domestic manufacturing and reduce dependence on imports, but it also imposes strict guidelines and regulations on defence companies.
Conclusion
In conclusion, the defence sector offers significant growth opportunities for investors, driven by the government’s push for domestic manufacturing and the sector’s growth potential. However, investors should be aware of the risks and challenges associated with the sector and conduct thorough research and analysis before making any investment decisions.
Brokerage firm Antique’s positive stance on Indian defence stocks, including BEL, HAL, and others, is a testament to the sector’s growth potential. Investors can consider investing in defence stocks through various routes, including equity investing, mutual funds, and exchange-traded funds.