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    Defence stocks soar as India pushes indigenous manufacturing

    Defence stocks soar as India pushes indigenous manufacturing

    Defence stocks soar as India pushes indigenous manufacturing
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    By CNBCTV18.com  IST (Published)

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    The defence stocks have given positive gains to investors this year. Hindustan Aeronautics shares have performed the strongest and gained over 112 percent, BEL shares have gained over 60 percent and Paras Defence shares have risen nearly 4 percent in the year so far. While the S&P BSE Sensex has risen 1.7 percent in the year.

    Shares of major defence companies zoomed from 2 percent to 5 percent on the BSE on Monday. In morning trade shares of Paras Defence and Space Technologies, Hindustan Aeronautics and BEL touched their intra-day highs rising 7 percent, 8.5 percent and 3 percent respectively.
    At 3:00 pm Paras Defence was trading green at Rs 770, up 3.75 percent, Hindustan Aeronautics was trading at Rs 2,621 gaining 7.79 percent and BEL was trading at Rs 339, up by 3.41 percent from the previous close on the BSE.
    The defence stocks have given positive gains to investors this year. Hindustan Aeronautics shares have performed the strongest and gained over 112 percent. BEL shares have gained over 60 percent and Paras Defence shares have risen nearly 4 percent in the year so far. While the S&P BSE Sensex has risen 1.7 percent in the year.
    Defence stocks have been rising after union defence minister Rajnath Singh on August 29, approved a fresh list of 780 components and subsystems that will only be procured from the domestic industry.
    Since then, BEL has risen 9.6 percent, Paras Defence has gained 13.88 percent and Hindustan Aeronautics has risen over 14 percent on the BSE.
    Meanwhile, brokerage firm Morgan Stanley has an 'overweight' call on the shares of BEL with a revised target price of Rs 373. Similarly, it also has an 'overweight' call on shares of HAL with a revised target price of Rs 3,024.
    Defence 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 defence companies in India.
    By 2025, DPEPP 2020 targets production of Rs 1.75 lakh crore and exports of Rs 35,000 crore. Approximately Rs 80,000 crore was the turnover of India's defence sector in 2020, according to DPEPP, as reported by news agency PTI.
    India, facing tough challenges from neighbours on its northern and western frontiers, is one of the largest importers of arms globally. According to estimates, the Indian armed forces are projected to spend around $130 billion (one billion is equal to Rs 100 crore) in capital procurement over the next five years.
    The defence ministry has set a goal of a turnover of $25 billion (Rs 1.75 lakh crore) in defence manufacturing in the next five years, including an export target of $5 billion worth of military hardware.
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