The Defence Acquisition Council (DAC) on Friday approved capital acquisition proposals worth approximately ₹52,000 crore, providing a significant boost to defence sector stocks. The approvals, which include major platforms for the Indian Army and Navy, are expected to drive growth in the domestic defence manufacturing ecosystem.
DAC Greenlights Major Defence Procurements
The DAC, chaired by Defence Minister Rajnath Singh, cleared several key proposals aimed at enhancing the operational capabilities of the Indian armed forces. Among the notable approvals are the acquisition of 155 mm artillery guns, advanced missiles, and naval systems. The total value of the proposals stands at ₹52,000 crore, with a focus on indigenous manufacturing under the 'Make in India' initiative.
According to an official statement, the DAC also approved the procurement of next-generation anti-tank guided missiles and advanced torpedoes for the Navy. These acquisitions are part of the government's long-term plan to modernize the military and reduce dependence on foreign imports.
Impact on Defence Stocks
The announcement led to a sharp rally in defence stocks, with shares of companies like Bharat Electronics Limited (BEL), Hindustan Aeronautics Limited (HAL), and Mazagon Dock Shipbuilders gaining up to 5% in intraday trade. Analysts believe that the approvals will provide a strong order pipeline for these companies over the next few years.
"The DAC's approval is a positive catalyst for the defence sector," said an analyst at a leading brokerage. "It not only underscores the government's commitment to indigenous manufacturing but also ensures sustained revenue visibility for key defence players."
Focus on Indigenous Manufacturing
The DAC's decisions align with the government's policy of promoting self-reliance in defence production. The approved proposals include a significant portion of indigenous content, with many systems to be manufactured by Indian firms under technology transfer agreements. This is expected to create jobs and boost the domestic defence industrial base.
Official data shows that India's defence exports have grown significantly in recent years, reaching ₹16,000 crore in the last fiscal year. The government aims to achieve a turnover of ₹1.75 lakh crore in defence manufacturing by 2025.
Market Reaction and Outlook
The broader market also reacted positively, with the BSE Sensex and Nifty 50 gaining ground. The defence index outperformed, rising over 3% on the day. Investors are now eyeing further orders from the government, especially in the aviation and naval segments.
"The defence sector is poised for strong growth, driven by government spending and policy support," added the analyst. "We expect more such approvals in the coming months, which will further boost investor sentiment."
