Bharat Dynamics shares rally 6% as govt plans Rs 40,000 crore defence R&D push
Shares of
Bharat Dynamics
surged as much as 5.6% on Friday to Rs 2,082.75 on the BSE after a report indicated that the
Indian government
is preparing to sharply increase defence R&D spending to Rs 40,000 crore next year, with plans to double it over the next five years, while enabling private players to compete on equal footing with public sector firms.
According to an ETNOW exclusive citing government sources, the Ministry of Defence is working on a proposal to significantly raise R&D expenditure—from around Rs 27,000 crore currently to nearly Rs 40,000 crore by next year—and further scale it up to Rs 70,000–80,000 crore over the next four to five years.
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The government also plans to simplify the defence acquisition process and amend existing rules to 'create a level playing field for the private sector,' the report said. It further noted that 'private sector companies will also be allowed to bid for various projects alongside PSUs such as
Hindustan Aeronautics Ltd
,
Bharat Electronics Ltd
,
Mazagon Dock Shipbuilders Ltd
, and Bharat Dynamics Ltd.'
Shares of Bharat Dynamics Ltd (BDL) jumped on the news, with high trading volumes underscoring strong investor interest. BDL is part of the Nifty Midcap 150 index, highlighting its significance within India's mid-cap equity space. Shares of Hindustan Aeronautics Ltd also rose as much as 1.2% to Rs 5,063 on the BSE during Friday's session.
Support for private sector, acquisition reform
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The Ministry is reportedly 'working on a proposal to support defence R&D projects' and plans to ensure that 'the private sector is likely to receive financial support comparable to public sector companies,' ETNOW said.
This anticipated overhaul in R&D funding and procurement rules comes amid the government's broader push to boost indigenous defence manufacturing and reduce import dependence. The defence establishment also aims to accelerate development timelines for critical technologies by streamlining approvals and increasing private sector participation.
Separate Rs 2,000–3,000 crore missile deal in pipeline
Separately, Bharat Dynamics is in focus following a May 27 Moneycontrol report that the Ministry of Defence is preparing a procurement order for 500 Invar anti-tank guided missiles (ATGMs) from the state-run firm. The deal is estimated to be worth between Rs 2,000 crore and Rs 3,000 crore.
The missiles, known for their precision strike capabilities, will be deployed on India's T-90 main battle tanks. The proposal is currently under financial vetting.
Strategic context: Aftermath of Operation Sindoor
The expected
missile procurement
follows Operation Sindoor, a precision military strike launched in response to a deadly terrorist attack in Pahalgam that claimed 26 civilian lives. The operation showcased India's increasing reliance on indigenous high-tech defence systems, including drones, air defence networks, and electronic warfare capabilities.
The plan to equip T-90 tanks with Invar missiles from Bharat Dynamics aligns with the government's broader thrust on operational preparedness and domestic capability-building.
Long-term tailwinds for BDL
BDL is well-positioned to benefit from India's expanding defence budget and modernisation drive. The company currently has an order book of Rs 3,110 crore and is targeting revenue growth of 28–30% in FY25. It has also made significant progress in indigenising critical components to reduce supply chain vulnerabilities.
The state-run missile maker is expanding its production capacity, aiming to double output in 3–5 years and triple it within the next decade to meet rising domestic and global demand.
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