New Delhi: Motilal Oswal Financial Services Ltd (MOFSL) highlights that recent approvals by the Defence Acquisition Council (DAC), amounting to ₹2.38 trillion, mark a significant step toward strengthening India’s defence capabilities while creating a robust growth pipeline for domestic defence companies.
These approvals span critical areas such as missile systems, transport aircraft, surveillance systems, and advanced weapon platforms across the Army, Air Force and Coast Guard. While some procurement will involve imports, the continued push toward indigenisation is expected to reduce dependency on foreign suppliers and support domestic manufacturing over time.
The report notes that defence companies already have strong order books and are well positioned to benefit from incremental opportunities, including exports. However, near-term challenges may arise due to dependence on imported components, although this risk is gradually declining with increasing localisation.
Among key companies, Bharat Electronics is expected to benefit from large upcoming orders such as the Navy’s next-generation corvette programme and the QRSAM system.
Hindustan Aeronautics is progressing toward deliveries of Tejas Mk1A aircraft, while Bharat Dynamics has achieved over 90% indigenisation in key missile systems, strengthening supply chain resilience.
Additionally, companies like Astra Microwave and Zen Technologies are seeing structural improvements through business restructuring, rising subsidiary contributions, and steady order inflows.
Looking ahead, defence production in India is targeted to reach ₹3 trillion by FY29-30, with exports expected to double to ₹500 billion, indicating sustained long-term growth for the sector.
Motilal Oswal Financial Services Ltd maintains a positive stance on the defence sector, supported by strong policy push, increasing domestic participation, and a visible order pipeline.
