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Business Standard
16-05-2025
- Business
- Business Standard
Sky high: Investors pile into defence stocks with all guns blazing
The Nifty India Defence Index jumped 5.6 per cent on Friday to cap a record 17.2 per cent weekly gain — its biggest since the gauge was launched in 2022. The index closed at a fresh peak of 8,309.2. This rally follows media reports suggesting an additional ₹50,000 crore could be earmarked for defence under a supplementary budget this financial year. 'The boost will take overall defence allocation past ₹7 trillion for 2025-26,' noted Siddhartha Khemka, head of research, wealth management, Motilal Oswal Financial Services. In the Union Budget presented in February, total defence outlay for FY26 was raised 7.7 per cent to ₹4.91 trillion from ₹4.57 trillion in the FY25 revised estimate. The figure includes both revenue expenditure – such as salaries & wages and operational costs – and capital allocation, which covers procurement of new equipment and other capital expenditure. Revenue expenditure has typically dominated defence outlays, accounting for 65 per cent in FY25 and averaging 62.4 per cent since FY21. Over the past five years, India's overall defence budget and defence capex have increased at a compound annual growth rate of 7.6 per cent. Companies in the defence sector tend to benefit more from higher capital allocations. For FY26, capital allocation is budgeted to increase 12.9 per cent to ₹1.8 trillion from ₹1.6 trillion in the FY25 revised estimate. However, actual capex in FY25 rose just 3.4 per cent over FY24; it was 7.3 per cent below the Budget estimate. In contrast, revenue expenditure is budgeted to rise 4.9 per cent to ₹3.12 trillion in FY26 from ₹2.97 trillion in the FY25 revised estimate. Actual revenue spending in FY25 was 2.3 per cent higher than in FY24 and 5.1 per cent above the Budget estimate. Shares of Paras Defence and Space Technologies, Cochin Shipyard, Mazagon Dock Shipbuilders, and Garden Reach Shipbuilders & Engineers climbed between 10 per cent and 20 per cent during the week, fuelling the latest rally. The Nifty Defence Index has now soared more than 50 per cent from last month's lows. Investor interest has been rekindled amid heightened hostilities between India and Pakistan. There is also optimism regarding India's push for defence self-reliance, expanded budgets, growing exports, and progress in indigenous design. 'The successful performance of made-in-India defence systems against Chinese and other platforms in Pakistan is likely to boost long-term demand for India-made equipment,' said Ashwini Shami, executive vice-president and senior portfolio manager, OmniScience Capital. 'This (the latest conflict) also showcased the modern style of remote warfare – without the involvement of too many personnel in direct engagement – and the sophistication of the Indian systems and their integration with disparate systems from various countries. This highlighted not only defence production but also India's integration capabilities to make them work together.'
Hans India
14-05-2025
- Business
- Hans India
Indian industry to churn $3-trn biz potential by 2035
New Delhi: India's industry sector is expected to outpace agriculture to take a larger share in the GDP (30-32%) by 2035 and opening a $3 trillion opportunity, driven majorly by manufacturing, a report showed on Tuesday. Manufacturing is expected to emerge as the growth leader taking two-third share of industrials and more than 20 per cent share of the GDP by 2035. Higher domestic consumption with increasing per capita income and a target of $1 trillion merchandise exports are expected to drive this growth, according to the report by Omniscience Capital. The manufacturing sector is pivotal to India's economic growth, significantly contributing to the nation's GDP. Currently, it stands as one of India's key growth sectors, catering to both domestic and international markets. Government initiatives such as the Production-Linked Incentive (PLI) scheme, 'Make in India' campaign, liberalised Foreign Direct Investment (FDI) policy, public-private partnership (PPP) models for various public undertakings, and infrastructure development are fuelling this growth. To achieve India's ambitious $1 trillion merchandise export target by 2030, the merchandise exports should increase from the current $450 billion to $1 trillion, requiring a year-on-year growth rate of 12 per cent, the report mentioned. India's share in global merchandise exports has doubled from 0.9 per cent share in 2005 to 1.8 per cent in 2023. India's merchandise exports have grown at a 3-year CAGR of 18.8 per cent from FY21 to FY24 and a 5-year CAGR of 9.4 per cent from FY19 to FY24. 'India is poised to continue emerging as a preferred destination for manufacturing investments due to the availability of raw materials, low labour costs, a favourable corporate tax rate for manufacturing, and proactive government support through incentives,' said Ashwini Shami, EVP and Portfolio Manager at OmniScience Capital. The government is developing 11 industrial corridor projects under the National Industrial Corridor Development Programme (NICDP) across the country in four phases.
Time of India
13-05-2025
- Business
- Time of India
India's industry sector to open $3 trillion opportunity by 2035, manufacturing to lead, ET Manufacturing
Advt Advt New Delhi: India's industry sector is expected to outpace agriculture to take a larger share in the GDP (30-32 per cent) by 2035 and opening a $3 trillion opportunity, driven majorly by manufacturing , a report showed on is expected to emerge as the growth leader taking two-third share of industrials and more than 20 per cent share of the GDP by domestic consumption with increasing per capita income and a target of $1 trillion merchandise exports are expected to drive this growth, according to the report by Omniscience manufacturing sector is pivotal to India's economic growth, significantly contributing to the nation's GDP. Currently, it stands as one of India's key growth sectors, catering to both domestic and international initiatives such as the Production-Linked Incentive (PLI) scheme, 'Make in India' campaign, liberalised Foreign Direct Investment (FDI) policy, public-private partnership (PPP) models for various public undertakings, and infrastructure development are fuelling this achieve India's ambitious $1 trillion merchandise export target by 2030, the merchandise exports should increase from the current $450 billion to $1 trillion, requiring a year-on-year growth rate of 12 per cent, the report share in global merchandise exports has doubled from 0.9 per cent share in 2005 to 1.8 per cent in 2023. India's merchandise exports have grown at a 3-year CAGR of 18.8 per cent from FY21 to FY24 and a 5-year CAGR of 9.4 per cent from FY19 to FY24."India is poised to continue emerging as a preferred destination for manufacturing investments due to the availability of raw materials, low labour costs, a favourable corporate tax rate for manufacturing, and proactive government support through incentives," said Ashwini Shami, EVP and Portfolio Manager at OmniScience government is developing 11 industrial corridor projects under the National Industrial Corridor Development Programme (NICDP) across the country in four of July 31, 2023, the DPIIT has sanctioned and released Rs 9,900 crore for the industrial corridor project, with Rs 9,817 crore already utilised. This is expected to create 1 million direct jobs and up to 3 million indirect jobs, contributing to socio-economic upliftment.--IANSna/
