The Indian defence sector is poised for growth, with Hindustan Aeronautics Limited (HAL) and Bharat Electronics Limited (BEL) set to gain from the government’s recent defence orders worth ₹21,100 crore. These orders are part of India’s initiative to enhance self-reliance in defence manufacturing under the Atmanirbhar Bharat program.
Source:- bbc news
Key Highlights:
HAL: The ₹13,828 crore contract involves the supply of 25 advanced light helicopters (ALH) and upgrades for 20 Dornier-228 aircraft for the Indian Coast Guard and military forces.
Source:- news 18
BEL: A ₹7,297 crore contract includes the provision of cutting-edge surveillance systems and communication equipment for the armed forces.
Both companies are expected to boost revenues, with HAL strengthening its position in aircraft production and BEL advancing in electronic warfare systems.
ICICI Securities’ Top Picks:
ICICI Securities has identified four defence-focused stocks for investment: HAL, BEL, Bharat Dynamics Limited (BDL), and Mazagon Dock Shipbuilders (MDL). These companies are expected to benefit from:
Government Policies: Increasing defence budgets and focus on domestic manufacturing.
Robust Order Books: Significant order inflows ensure sustained revenue growth over the next few years.
Operational Efficiency: Improved margins due to economies of scale and technological advancements.
Outlook:
HAL and BEL’s contracts are a testament to India’s increasing reliance on indigenous capabilities, while companies like BDL and MDL are gaining traction in missile systems and shipbuilding. With steady revenue growth, operational efficiency, and favorable government policies, these stocks are attractive investments for the long term.
Investors may consider adding these stocks to their portfolios, focusing on HAL and BEL for immediate gains and BDL and MDL for growth potential.
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