Bharat Electronics, HAL, BEML: Defence stocks in spotlight as Centre clears ₹2.12 lakh crore procurement proposals

Defence stocks are expected to hog the limelight on Tuesday, October 27, after the government cleared procurement proposals worth ₹2.12 lakh crore for a range of military platforms and weapon systems on Monday.

The list includes light multi-role helicopters, long-range kamikaze drones, and radars, aimed at strengthening the armed forces' combat capabilities.

The procurement proposals were approved by the Defence Acquisition Council (DAC), the defence ministry's highest decision-making body on military procurement. It was chaired by Defence Minister Rajnath Singh.

The DAC accorded Acceptance of Necessity (AoN), or in-principle administrative approval, to various capital acquisition proposals of an estimated cost of about ₹2,12,000 crore, the defence ministry said.

Here are the details

For the Indian Army, approval was accorded for the procurement of high mobility vehicles (HMVs), self-propelled tracked gun system, gun shot response system (GSRS), light multi-role helicopters (LMRH), very short-range air defence system (VSHORADS) and counter unmanned aerial system (C-UAS), it said.

The DAC also cleared the acquisition of other unmanned aerial system, surveillance aerial vehicles, an integrated surveillance and strike system and a long-range Kamikaze drone system for the Army.

While the HMVs are expected to enhance operational capabilities, logistical support and mobility in challenging terrains, the self-propelled tracked gun system will provide mobility and firepower to mechanised formations.

Stocks that could be in focus

Hindustan Aeronautics Ltd (HAL)

HAL is the most relevant listed company to track for potential helicopter-related opportunities, although the approved proposals do not confirm the supplier.

Bharat Electronics Ltd (BEL)

Larsen & Toubro (L&T)

BEML Ltd

However, the procurement announcement does not identify BEML as the selected supplier.

Zen Technologies

Zen Technologies is a relevant listed company to monitor for this theme, but no company-specific order was announced.

Mazagon Dock Shipbuilders

Mazagon Dock is relevant to the broader naval modernisation theme, although the announcement does not allocate the proposed naval platform work to the company.

Cochin Shipyard

Cochin Shipyard is a secondary watchlist candidate, alongside other naval shipbuilders, pending details on the platforms and their eventual builders.

What you need to know

The Defence Acquisition Council's Acceptance of Necessity (AoN) is an in-principle approval, not a confirmed order.

The ₹2.12 lakh crore figure covers multiple procurement proposals, and the announcement does not specify the company-wise order values.

The emphasis on domestic procurement, at approximately 82% of the total, makes Indian defence manufacturers relevant to watch.