India’s ₹67,000 Crore Defence Push: DAC Approvals May Boost BEL, HAL, Adani, L&T

Defence Stocks to Watch After DAC Clears ₹67,000 Crore Worth of Proposals

India’s Defence Acquisition Council (DAC) has approved military modernisation proposals worth ₹67,000 crore on August 5, aimed at strengthening the capabilities of the Indian Army, Navy, and Air Force. These fresh “Acceptance of Necessity” (AoNs) come as a major boost for domestic defence manufacturing and are likely to benefit several listed and private defence players.

Army Proposals and Beneficiaries

The Indian Army will procure thermal imager-based driver night sights for infantry combat vehicles like BMP-1/2/2K and T-72 tanks. Bharat Electronics Limited (BEL), which already supplies thermal imaging systems, is expected to gain from this move.

Indian Navy Projects

For the Navy, DAC has approved the procurement of Compact Autonomous Surface Craft, potentially benefiting startups like Sagar Defence. The approval of BrahMos Fire Control Systems and Launchers could positively impact Larsen & Toubro (L&T) and Godrej Aerospace. The BARAK-1 missile system upgrade may benefit BEL, Bharat Dynamics, and Adani Defence.

Air Force Acquisitions

The Indian Air Force will procure Mountain Radars, likely aiding BEL and Astra Microwave. The upgradation of SPYDER and SAKSHAM weapon systems for integration into IACCS can also benefit BEL. Furthermore, the acquisition of Medium Altitude Long Endurance (MALE) drones could uplift Adani Defence, Tata Advanced Systems, HAL, BEL, and L&T. The maintenance of S-400 systems is another area where BEL and Bharat Dynamics could gain.

Despite the positive announcements, the Nifty India Defence Index has dropped 11% over the last month, with BEL and Bharat Dynamics down 8% and 18%, respectively. However, the fresh approvals may trigger renewed investor interest in these defence counters.