From BEL, HAL to Mishra Dhatu Nigam— defence stocks surge amid reports of Indian Army to get ₹30,000 crore QRSAM boost
Several defence stocks, including BEL, HAL and Mishra Dhatu Nigam, saw healthy gains in intraday trade on Tuesday, June 10, amid reports that the Indian Army is all set to get a ₹ 30,000 crore boost with a new surface-to-air missile system.
The Nifty India Defence index rose by over a per cent during the session, with stocks such as Dynamatic Technologies, Data Patterns (India), Astra Microwave Products and DCX Systems, jumping 2-7 per cent.
According to an ANI report, the Indian Army is all set to get a ₹ 30,000 crore boost with a new surface-to-air missile system, which the Defence Ministry could soon approve for acquisition.
"The Defence Ministry is scheduled to take up the proposal for buying three regiments of the indigenous Quick Reaction Surface to Air Missile system (QRSAM) for the Army Air Defence for deployment along both western and northern borders," ANI reported, quoting defence officials saying so.
The ANI report further added that the Army Air Defence is also getting a number of new radars, very short-range air defence systems, along with jammers and laser-based systems to deal with drones of Turkish and Chinese origin.
Defence stocks have been on a solid uptrend in the wake of Operation Sindoor in May.
Defence stocks such as Garden Reach Shipbuilders, Cochin Shipyard, Zen Technologies, BEML, Mishra Dhatu Nigam, Data Patterns, BDL and BEL have surged 25-80 per cent over the last one month.
Stocks such as Solar Industries, MTAR Technologies, Mazagon Dock Shipbuilders, Dynamatic Tech, HAL, Cyient DLM and Paras Defence have jumped 10-25 per cent in the same period.
Experts say defence stocks still remain long-term bets due to their solid growth prospects. However, due to the recent rise in stock prices, there could be intermittent profit booking.
"Defence stocks have more steam left for the long term. There could be some profit booking now and then. The story is intact for the long term due to expectations of an increase in the defence budget. So, investors should remain invested for at least the next one to two years," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.
Tapse recommends buying four defence stocks- Data Patterns, HAL, BEL and BEML- for the long term. He pointed out that the Defence Research and Development Organisation (DRDO) has transferred nine advanced defence technologies to ten public and private sector partners, which could benefit stocks like BEL and BEML.
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