BEL, HAL Among Key Beneficiaries In Defence As DAC Approves Proposals Worth Rs 21,772 Crore

ICICI Securities has provided a deep dive into the defence sector following the Defence Acquisition Council’s (DAC) approval of five capital acquisition
proposals worth almost Rs 21,800 crore. The approval spans a variety of key defence needs, ranging from maritime surveillance to the overhaul of armoured and air force fleet capabilities. Among the top beneficiaries identified by ICICI Securities are Bharat Electronics Ltd. (BEL), Astra Microwave Products Ltd., Hindustan Aeronautics Ltd. (HAL), and PTC Industries Ltd.

ICICI Securities has identified several key beneficiaries within the defence sector:

• Bharat Electronics (BEL): BEL is expected to be the biggest beneficiary due to its involvement in the EWS package for the Su-30MKI aircraft and its participation in various other proposals, including shipbuilding and the overhaul of electronic components and fire control systems for tanks and BMPs.

• Astra Microwave: Astra is likely to benefit from the EWS package, particularly the Jammer pods and NGRWR systems.

• Hindustan Aeronautics Limited (HAL): HAL stands to gain from the procurement of ALH M (MR) helicopters and the overhaul of Su-30MKI engines. Additionally, PTC Industries is expected to benefit from the supply of critical components during the overhaul of Su-30MKI engines, following a memorandum of understanding (MoU) with HAL’s Koraput facility.

• Ordnance Factory Boards (OFBs) and other defence players: The overhaul of India’s armoured fleet, which includes revamping mechanical, electrical, and fire control systems, is likely to benefit various players in the defence ecosystem, especially those involved in indigenisation.

• Shipbuilding Proposals: The smaller vessels included in the shipbuilding proposals will be subject to competitive bidding, with both private companies and Defence Public Sector Undertakings (DPSUs) likely to participate.

Despite the current AoN being one of the smaller approvals in recent months, it marks a significant step forward after a three-month gap in domestic ordering. The total AoN approvals so far in financial year 2025 stand at Rs 1.6 lakh crore, compared to Rs 3.6 lakh crore and Rs 2.6 lakh crore in financial year 2024 and financial year 2023, respectively.