- Defence ministry approved Rs 1.1 lakh crore capital acquisitions for Army, Navy, Air Force
- Nearly 98% of funds allocated for domestic industry, boosting indigenous defence manufacturing
- HAL and BEL identified as key beneficiaries, with multiple procurement items awarded
Hindustan Aeronautics Ltd (HAL) and Bharat Electronics (BEL) are likely to be the key beneficiaries of the latest capital acquisition proposals worth Rs 1.10 lakh crore approved by the defence ministry, analysts said.
The Defence Acquisition Council (DAC) on September 7 accorded Acceptance of Necessity (AoN) for procurement proposals worth Rs 1.1 lakh crore, spanning the Army, Navy and Air Force.
According to Kotak Institutional Equities, nearly 98% of the value is earmarked for domestic industry, making this one of the largest single-sitting indigenous clearances on record.
For the Indian Army, approvals cover CBRN recce vehicles, high mobility vehicles, self-propelled mechanical mine layers, advanced light helicopters (ALH Dhruv), trawl tanks and Sarvatra bridge systems.
For Navy, the DAC cleared Arudhra medium-power radars and marine gas turbines for warship propulsion, a pointed import-substitution move.
For Air Force, approvals span war-fighting enhancements across fighters, transport aircraft and helicopters, ground-based multi-purpose jammers and a tri-service defense forces secure access card (RFID) system.
“Unlike the import-heavy March 2026 sitting (S-400, medium transport aircraft), this package is a Buy-Indian / IDDM opportunity, with BEL and HAL the likely multi-item beneficiaries,” said Kotak Institutional Equities.
With this, cumulative AoNs since FY24 crossed Rs 18 lakh crore. However, the brokerage firm noted that AoN is an in-principle first step, while RFP-to-contract typically lags two years, so order accrual will be in FY2027-29E. It estimates Rs 6.5 lakh crore – Rs 7 lakh crore of new orders over FY2027-29E as these convert.
BEL, HAL Key Beneficiaries
According to Kotak Equities, BEL screens as the standout multi-item winner present across CBRN systems, Arudhra radars, ground-based jammers, IAF EW upgrades and secure-access cards, extending a visible pipeline after Rs 6,200 crore of order wins earlier in FY2027.
HAL is the biggest single-ticket beneficiary via ALH Dhruv (sole OEM), marine gas-turbine assembly and IAF platform upgrades.
Within the land systems ecosystem, the brokerage firm believes BEML, Larsen & Toubro (L&T), Ashok Leyland Defence, Tata and Bharat Forge stand to gain from high-mobility vehicles, mine-layers, trawl tanks and Sarvatra bridges, a rare large land-mobility clearance.
Kotak Institutional Equities said HAL is its preferred pick in the sector. It has an ‘Add' rating on HAL shares with a target price of Rs 5,305 apiece. It has a ‘Reduce' call on BEL shares with a target price of Rs 420.
The brokerage firm has maintained its ‘Sell' ratings on Mazagon Dock Shipbuilders, Cochin Shipyard and Solar Industries shares.
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