Defence shares Zen, Paras, Dynamatic, Unimech rally up to 6%; here's why

Defence stocks in focus: The Defence Acquisition Council (DAC) approved capital acquisition proposals worth about ₹52,000 crore to strengthen the combat capabilities of the armed forces.

Defence shares price movement

 

Shares of defence companies were in demand with the BSE India Defence and Nifty India Defence indices gaining over 1 per cent each on the bourses after the Defence Acquisition Council (DAC) accorded Acceptance of Necessity (AoN) worth ₹52,000 crore.

 

At 10:06 AM, the BSE India Defence and Nifty India Defence indices were up 1.3 per cent each, as compared to 0.5 per cent rise in the BSE Sensex and Nifty 50.

 

Zen Technologies, Paras Defence and Space Technologies, Unimech Aerospace and Manufacturing, Ideaforge Technology and Dynamatic Technologies rallied between 4 per cent and 6 per cent.

 

 

Data Patterns (India), Mishra Dhatu Nigam (MIDHANI), Bharat Electronics (BEL), Bharat Dynamics (BDL), Solar Industries, Hindustan Aeronautics (HAL), MTAR Technologies and DCX Systems were up in the range of 1 per cent to 3 per cent.

 

What’s driving defence stocks?

 

The Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh, approved capital acquisition proposals worth about ₹52,000 crore to strengthen the combat capabilities of the armed forces.

 

According to the Defence Ministry, the approved proposals span the Army, Navy and Air Force, focusing on air defence systems, anti-drone capabilities, surveillance platforms and next-generation military technologies.

 

For the Indian Army, the council cleared the procurement of the Anti-Unmanned Aerial Vehicles Electronic Warfare System, 'Akash Tarang', Man-Portable Anti-Tank Guided Missile (MPATGM) systems, Medium-Range Surface-to-Air Missile (MRSAM) weapon systems, Very Short-Range Air Defence Systems (V-SHORADS), Active Protection Systems for tanks and jet-based kamikaze drone systems, the ministry said.

 

For the Indian Navy, the DAC approved the procurement of Multi-Influence Ground Mines (MIGM), Naval Shipborne Unmanned Aerial Systems (NSUAS), and the establishment of a Land-Based Testing Facility for electric propulsion systems. The ministry said the mine systems would help restrict adversary movement, while the unmanned aerial systems would improve maritime situational awareness through advanced sensor capabilities.

 

For the Indian Air Force, the council approved the acquisition of Fixed-Wing-Based High-Altitude Pseudo Satellites (FW-HAPS), along with other proposals. 

 

Brokerages view on defence sector after Govt clears ₹52K cr military purchase proposals

 

The approvals, such as Kamikaze loitering munitions, unmanned systems, anti-protection systems, anti-drone Electronic Warfare system, and HAPS represent a fundamental pivot towards technology-intensive systems from conventional, large-scale hardware platforms, ICICI Securities said in a note.

 

BDL is the primary production partner for missile systems MP-ATGM and MR-SAM, along with Bharat Electronics (BEL) being the supplier of key electronic items. For the anti-drone EW system, BEL is likely to be the prime contractor or system integrator while Zen Technologies is expected to be the supplier of signal processing and jamming/spoofing components. Apollo Microsystems is the development cum production partner for MIGM, the brokerage highlighted.

 

According to the ICICI Securities note, in the case of Jet based Kamikaze drones, various private players are expected to participate in the request for proposals (RFP). Solar Industries (in partnership with CSIR-NAL) and Zen Technologies are also in process of developing these kamikaze drones. For NSUAS also, various companies will participate including Adani, JSW, VEM, Ideaforge etc. Companies like Data Patterns & Astra Microwave are also likely to be involved in supplying electronic sub-systems in some of the key missile systems, ICICI Securities said.

 

Analysts at Choice Institutional Equities believe the ₹52,000 crore DAC approvals reinforce a structural growth cycle for India’s defence sector, rather than a one-off trigger. The continued focus on indigenisation and technology-led procurement is anticipated to drive steady order visibility over the next 12–24 months. The brokerage firm said they remain positive, with BEL as a consistent compounder and BDL as a direct play on missile-led growth, while drones and electronic warfare add further long-term upside.    ============================================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.