The Indian defence sector witnessed a sharp rally in early trading on Friday, following the Defence Acquisition Council’s (DAC) approval of capital acquisition proposals worth ₹79,000 crore for the Armed Forces.
This decisive move by the government has sent a wave of optimism across the defence manufacturing landscape, boosting investor confidence and lifting several key stocks.
Market Performance
Shares of major defence companies surged as investors reacted to the DAC announcement:
- Bharat Dynamics: Up over 2%
- BEML: Up over 2%
- Cochin Shipyard: Up over 2%
- Paras Defence & Space Technologies: Up over 2%
Other gainers in the Nifty India Defence Index included:
- Garden Reach Shipbuilders & Engineers: +1–2%
- Unimech Aerospace & Manufacturing: +1–2%
- Mazagon Dock Shipbuilders: +1–2%
- Data Patterns (India): +1–2%
Overall, the Nifty India Defence Index rose by more than 1%, reflecting broad-based strength across defence manufacturing stocks.
Key Government Approvals
The DAC has cleared key capital procurement projects designed to strengthen and modernize the capabilities of the Indian Armed Forces. Notable proposals cleared include:
- Nag Missile System (Tracked) Mk-II (NAMIS)
- Ground-Based Mobile ELINT System (GBMES)
- High Mobility Vehicles (HMVs) with material handling cranes for the Indian Army
The Ministry of Defence highlighted that these acquisitions are set to strengthen operational readiness and modernize the Army’s arsenal.
Company Highlights
Bharat Dynamics: Known for its missile and defence systems, the company’s stock rose sharply, reflecting market optimism about new procurement projects.
BEML: A leading supplier of defence and heavy equipment vehicles, BEML benefitted from approvals related to mobility and support vehicles.
Cochin Shipyard & Mazagon Dock Shipbuilders: Both shipbuilding giants gained as naval procurement projects received a boost, signaling expansion in India’s maritime defence capabilities.
Paras Defence & Space Technologies: With focus on missile systems and space-grade technologies, the company’s stock saw healthy gains.
Other companies riding the momentum include Garden Reach Shipbuilders & Engineers, Unimech Aerospace & Manufacturing, and Data Patterns (India).
Domestic Procurement Gains
The DAC’s approvals reflect a growing focus on domestic defence manufacturing. Key highlights:
- In FY26 so far, proposals worth approximately ₹2.5 lakh crore have received approval under various capital procurement categories.
- This surpasses FY25 approvals of ₹2.2 lakh crore.
- Domestic procurement share has jumped to 92% in FY25 from 54% in FY19.
This trend underscores the government’s commitment to strengthening Atmanirbhar Bharat initiatives in the defence sector, providing a significant opportunity for Indian defence manufacturers.
Summary
Friday’s surge in defence stocks shows how government policies can directly influence market sentiment. With ₹79,000 crore worth of approvals and a continued emphasis on domestic procurement, companies like Bharat Dynamics, BEML, Cochin Shipyard, Paras Defence & Space Technologies, Garden Reach Shipbuilders, Unimech Aerospace, Mazagon Dock Shipbuilders, and Data Patterns (India) are poised to remain in focus.
The market’s reaction is a clear indicator that investors are closely watching government procurement decisions, reflecting both optimism and confidence in India’s defence manufacturing growth story.
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