Defence Stocks in Focus After ₹2.38 Lakh Cr DAC Deals

India’s defence procurement pipeline has surged to an all-time high this fiscal, with total approvals touching ₹6.73 lakh crore. This excludes the Rafale-related Acceptance of Necessity (AoN) which is valued at ₹3.25 lakh crore. The figure is more than three times last year’s ₹2.2 lakh crore.

The latest boost comes after Defence Minister Rajnath Singh cleared proposals worth approximately ₹2.38 lakh crore during a Defence Acquisition Council (DAC) meeting on Friday. The DAC is the country’s apex body for defence procurement decisions and it granted AoN to a range of critical projects.

This development has put defence-related stocks like Bharat Electronics, Hindustan Aeronautics Ltd. (HAL), and Garden Reach Shipbuilders and Engineers Ltd. in the spotlight at the start of the week.

Focus Areas of Approval

The newly cleared projects are designed to strengthen India’s capabilities across air defence, surveillance, communication, and logistics.

Indian Army Initiatives Include:

Air Defence Tracked Systems, expected to benefit Bharat Electronics
High Capacity Radio Relay systems, also favoring Bharat Electronics
Runway-Independent Aerial Surveillance Systems, where players like Ideaforge and other private firms could gain

For the Indian Air Force:

Procurement of S-400 air defence systems (around five units valued at $6–7 billion which are to be sourced from Russia)
Development of Remotely Piloted Strike Aircraft which likely involve HAL and private sector participants
Overhaul of Su-30 aircraft engines which is again an opportunity for HAL

Indian Coast Guard Plans:

Acquisition of Heavy Duty Air Cushion Vehicles (hovercrafts), with Garden Reach Shipbuilders and Goa Shipyard among likely beneficiaries

The Friday meeting followed another high-level review chaired by Singh on March 24, highlighting an intensified focus on defence preparedness and strategic capability building.

Market Reaction

Despite the positive long-term outlook, defence stocks saw selling pressure in the previous session. The Nifty India Defence index declined 2.5%, with most constituents ending in the red. Only a few stocks such as Axiscades, Aequs Ltd., and MTAR Tech, managed gains. With Axiscades rising 5%. On the downside, companies like Mishra Dhatu Nigam, Dynamatic Technologies, Garden Reach Shipbuilders, Cochin Shipyard, and Asta Microwave posted losses ranging from 4.2% to 6.1%.