Defense stocks have given positive gains to investors this year. Shares of Hindustan Aeronautics were the best performers and gained more than 112%, shares of BEL gained more than 60% and shares of Paras Defense rose almost 4% during the year to now. While the S&P BSE Sensex rose 1.7% over the year.
As of 15:00, Paras Defense was trading green at Rs 770, up 3.75%, Hindustan Aeronautics was trading at Rs 2,621 gaining 7.79% and BEL was trading at Rs 339, up 3.41% compared to the previous close on BSE.
Defense stocks have given positive gains to investors this year. Shares of Hindustan Aeronautics were the best performers and gained more than 112%. BEL shares are up more than 60% and Paras Defense shares are up nearly 4% in the year to date. While the S&P BSE Sensex rose 1.7% over the year.
Defense stocks rose after Union Defense Minister Rajnath Singh on August 29 approved a new list of 780 components and subsystems to be procured only from domestic industry.
Meanwhile, brokerage firm Morgan Stanley has an “overweight” call on BEL shares with a revised target price of Rs 373. Similarly, he also has an “overweight” call on HAL shares with a revised target price of Rs 3,024.
The Defense Production and Export Promotion Policy 2020 (DPEPP 2020) is likely to guide more than doubling production and procurement targets over the next few years for defense companies in India.
By 2025, the DPEPP 2020 targets production of Rs 1.75 lakh crore and exports of Rs 35,000 crore. About Rs 80,000 crore was India’s defense sector revenue in 2020, according to the DPEPP, as reported by news agency PTI.
India, facing tough challenges from its neighbors on its northern and western borders, is one of the largest arms importers in the world. It is estimated that the Indian Armed Forces is expected to spend about $130 billion (one billion is equivalent to 100 crores of rupees) on capital acquisitions over the next five years.
The Ministry of Defense has set a target of $25 billion (Rs 1.75 lakh crore) in defense manufacturing over the next five years, including an export target of 5 billions of dollars worth of military equipment.
(Edited by : Nishta Pandey)