Defence stocks up on government panel#39;s nod to proposals worth Rs 7,800 crore

The defence ministry has said all purchases will be made from indigenous sources, which is expected to give an boost to Indian firms

August 25, 2023 / 10:27 AM IST

Defence Acquisition Council gives nod for Rs 7,800 crore proposals, defence stocks gain

Defence stocks were trading higher on August 25, day after the Defence Acquisition Council (DAC) gave a green signal for proposals worth Rs 7,800 crore to enhance the operational capabilities of the armed forces.

The defence ministry, under which the DAC works, said all procurements would be made from indigenous sources only.

At 10.04 am, shares of MTAR TechnologiesMazagon Dock ShipbuildersBharat DynamicsHindustan AeronauticsBharat ElectronicsBharat Heavy ElectricalsZen TechnologiesParas Defence were up between 0.3 and 1.9 percent.

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For the Indian Air Force, DAC approved the request to buy and install an Electronic Warfare Suite on Mi-17 V5 helicopters. This will help the helicopters stay safer. The suite will come from Bharat Electronics.

ICICI Securities said Bharat Electronics as well as Astra Microwave could benefit from the installation of the electronic warfare suite.

In addition, “acceptance of necessity (AoN)” has been given for ground-based autonomous system for mechanised infantry and armoured regiments, light machine gun, bridge-laying tank, ruggedized laptops and tablets under Project Shakti and procurement of weapons for MH-60R helicopters.

“While these AoNs are expected to translate into orders in 18-24 months, we see a focused approach by the government to enhance capabilities of all the armed forces, even in a pre-election year,” the domestic brokerage firm said.

Defence spending is unlikely to take a backseat, ensuring that orderbooks of relevant companies remain robust, it said.

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