Defence stocks in focus; Paras, DCX freeze at 5% upper circuit on order win

Data Patterns (India), Bharat Electronics, Mishra Dhatu Nigam, Garden Reach Shipbuilders & Engineers and Zen Technologies are up in the range of 3 per cent to 6 per cent

Shares of defence-related companies were in focus on Wednesday with Paras Defence and Space Technologies and DCX Systems locked in the 5-per cent upper circuit on the BSE in today's intraday trade.The buying interest was seen in these defence stocks after they won domestic and international orders.

 

Besides Paras and DCX, Data Patterns (India), Bharat Electronics, Mishra Dhatu Nigam, Garden Reach Shipbuilders & Engineers and Zen Technologies were up in the range of 3 per cent to 6 per cent. By comparison, the BSE Sensex was down 0.23 per cent at 80,181 at 10:24 AM. Notably, the rise has come in the stock prices after the defense pack saw up to 50 per cent correction from their respective all-time highs.

 

The global defence landscape presents significant growth opportunities driven by increasing defence spending and the modernisation of Armed forces.

 

In a path-breaking milestone for India's aerospace and defence (A&D) industry, Prime Minister Narendra Modi and Spanish President Pedro Sánchez Pérez-Castejón, on Monday, inaugurated the Final Assembly Line (FAL) complex, which will build Airbus C-295 tactical transport aircraft for the Indian Air Force (IAF) in Vadodara, Gujarat.

 

This is the first time India's Ministry of Defence (MoD) has entrusted a private firm to carry out the entire final assembly of a military aircraft. The defence vertical of the Tata group, Tata Advanced Systems Ltd (TASL), is partnering Airbus Defence and Space in this 'Make in India' project. CLICK HERE FOR FULL REPORTS

 

Among individual stocks, Paras Defence share price was locked at Rs 1,008.35 after the company received an order from Opto Electronics Factory (OLF), a unit of India Optel Ltd (a government enterprise), worth approximately Rs 42.05 crore. The order is for supply of 5 types of electronic control sub-systems used in Thermal Imaging Fire Control System (TIFCS) delivered by OLF to Indian Armed Forces. The order is to be executed within 24 months.

 

Paras is a leading tier-2 engineering company in India's defence and space sectors, offering an extensive range of indigenously designed, developed and manufactured (IDDM) products and solutions.

 

The Indian defence sector, the world's second largest armed force, is on the brink of a major transformation. The Government has prioritised the Defence and Aerospace sector under the 'Aatmanirbhar Bharat' (Self-Reliant India) initiative, focusing on establishing indigenous manufacturing capabilities supported by a robust research and development infrastructure. The Ministry of Defence aims to achieve a turnover of Rs 1.75 trillion in aerospace and defence manufacturing by 2025, including Rs 35,000 crore from exports, Paras said in its FY24 annual report.

 

Shares of DCX Systems, too, were locked in the upper circuit for a second straight day, up 5 per cent at Rs 338.20, after the company informed that it has received orders from overseas customers for $1,227,971.00 (equivalent to about Rs 10.31 crore at exchange rate of 1 US dollar = Rs 84). The order is for supply of cable and wire harness assemblies.

 

In a separate exchange filing, DCX Systems informed that the company's wholly owned subsidiary Raneal Advanced Systems Private Limited has received export orders from Lockheed Martin Global Inc, USA for $ 45,199,440.00 (equivalent to about Rs 379.67 crore at exchange rate of 1 US dollar = Rs 84).

 

Given its expertise in electronics manufacturing services and strong relationships with global defence companies, DCX is well-positioned to capitalise on these trends through multiple operational, technological and financial capabilities, according to the company.

 

DCX Systems said it aligns its growth strategies with the 'Make in India' initiative, actively seeking opportunities to acquire technology (ToT) from original equipment manufacturers (OEMs) in the aerospace, defence, and civilian applications sectors.

 

The growing Indian defence and aerospace landscape presents significant opportunities for DCX Systems. The Indian defence sector is expected to attain a value of $70 billion by 2030, driven by initiatives like 'Make in India' and increased foreign direct investment (FDI) in the defence sector. DCX Systems is well-positioned to capitalise on these opportunities with its strong manufacturing capabilities and strategic partnerships/Joint Ventures, the company said in its FY24 annual report.