India’s aerospace and defence sectors must grow if the nation is to maintain its strategic independence. India is one of the world’s top importers of military hardware.
The industry is in a strong position to grow thanks to greater indigenization, coercive support, and government support, which is bolstered by the nation’s rising defence budget allocation.
Let’s discuss the top 5 Defence Stocks in India where you can invest:
- Hindustan Aeronautics Ltd.
India’s sole producer of defence aviation equipment is Hindustan Aeronautics Ltd (HAL). India is modernising its armed forces in response to obsolescence and the geopolitical environment, which should hasten the purchase of indigenous military goods.
HAL has demonstrated its ability to manufacture military aircraft, helicopters, engines, and other items built with permission from foreign OEMs. Orders from friendly nations can improve the company’s possibilities for expansion.
Long-term share price projections and targets for Hindustan Aeronautics HAL indicate an uptrend; the closest achievable share price targets are 2524, 2768, or even 2811.80. At this moment, the HAL share price is 2500.40.
- Bharat Dynamics Ltd.
The order book for Bharat Dynamics (BDL), India’s primary and sole manufacturer of several missiles, is projected to grow significantly as the nation lays a large emphasis on its domestic missile development. Surface-to-Air Missiles (SAMs), torpedoes, and Anti-Tank Guided Missiles (ATGM), as well as refurbishing and life extension, are only supplied by BDL to the Indian Armed Forces.
BDL’s operational performance has significantly increased over time; in FY22, the company turned a profit of INR 7.3 billion from an operating deficit of INR 125 million. From -1.2% in FY13 to a peak of 25.8% in FY22, BDL’s margin rose.
- Mazagon Dock Shipbuilders Ltd.
Mazagon Dock Shipbuilders Ltd specialises in building and repairing ships, submarines, and other types of vessels. It also provides engineering products to a range of domestic and international customers. It was established in 1934 as a private firm before being acquired by the Indian government in 1960.
Before, the potential size of Mazagon Dock Shipbuilders was only P75I submarine orders, with opportunistic designations like NGOPV (Navy Next Generation offshore patrol vessel).
The management, however, is becoming more open about the opportunities in this field. The Next Generation Corvette (NGC), P75I, MDD, and a recurrence of P17A are among the INR 1.6 trillion in opportunities identified by Mazagon in the near to medium term (INR 350 bn). NGC and P75I will be the main drivers in the short- to medium-term, though.
- The Data Patterns (India) Ltd
An electronics solution and systems company situated in Chennai called Data Patterns (India) Ltd has a sizable stake in the aerospace and defence industries. Its expertise is supported by reusable building block models that enable it to provide fundamental modules that are used to construct systems and subsystems.
The company makes 1,000+ building blocks and more than 60 systems/subsystems products at its 100,000-square-foot location in Chennai. A new manufacturing facility close by has been built for INR 1.8 billion.
- Bharat Electronics Limited (BEL)
Bharat Electronics Limited (BEL) is a government-owned defence corporation that is reportedly aiming to export its goods to friendly countries. The business designs, creates and produces electronic weapons, including radars, as well as critical EVMs, or electronic voting machines.
The company is positioned to profit from the government’s increasing investment in the defence sector given its track record of successful execution. Additionally, the recent import ban implemented by the central government will benefit businesses like Bharat Electronics since the nation’s defence system will now only depend on domestic suppliers of defence equipment.
As of Jan 2023, BEL share price is around Rs.103. The market value of a publicly traded company’s outstanding shares is known as market capitalization, often known as market cap. As of March 13th, 2012, Bharat Electronics had a 52,813 Cr market cap.
The Indian government has recently made considerable investments in the military. The Indian government will keep funding these industries due to their connections with China and Pakistan. The government is also creating several initiatives that would directly or indirectly support these businesses, including Make in India and Atmanirbhar Bharat.