Latest news with #DefencePublicSectorUndertakings
Mint
a day ago
- Business
- Mint
Will the bull run in defence stocks continue? Long-term growth seen, but valuations flash warning signs
Defence stocks have been on a blistering rally, with the NSE Defence Index soaring 20 percent in the last one month, vastly outperforming the Nifty 50, which rose by only about 1 percent during the same period. With India sharpening its strategic focus on indigenous defence manufacturing amid global geopolitical tensions, many investors are wondering: Will the bull run in defence stocks continue? While the long-term fundamentals remain strong, market experts warn that valuations have already priced in much of the near-term earnings growth. The bull case for defence stocks is rooted in a larger geopolitical and policy shift. According to Omniscience Capital, which manages a defence-focused smallcase, the Indian government is likely to ramp up defence spending from the current ~2 percent of GDP to 3–4 percent over the next decade. With India expected to become a $10 trillion economy by 2035, this would imply an annual defence budget exceeding USD 300 billion, or ₹ 30 lakh crore—translating to a 16–17 percent CAGR in defence expenditure over the next ten years. Omniscience Capital's report, 'Operation Sindoor: An Inflection Point for Bharat's Omni Defence Strategy', argues that the recent military and security operations have highlighted the need for a robust, future-ready defence infrastructure—not just to protect borders, but also to secure India's digital ecosystems, trade routes, and overseas strategic assets. India's domestic defence production crossed ₹ 1.4 lakh crore in FY25, with DPSUs (Defence Public Sector Undertakings) contributing around ₹ 1.1 lakh crore, or 78 percent. Of this, ₹ 90,000 crore came from 8 listed DPSUs, forming 66 percent of the total DPSU output. The government now aims to double the total defence production to ₹ 3 lakh crore by 2029. Even assuming DPSUs maintain a 60 percent share, their combined output would need to grow at 18 percent CAGR, hitting ₹ 1.8 lakh crore by 2029. Analysts project that the turnover of listed DPSUs will grow by 18 percent in FY26 and 22 percent in FY27, while 9 unlisted DPSUs are estimated to generate over ₹ 20,000 crore in FY26 alone. Private players are also expected to play a larger role, diversifying the sector's investment potential. However, while the sector's structural growth story remains intact, concerns around high valuations are surfacing. The median trailing P/E of listed DPSUs stands at 57, with forward P/E for FY26 and FY27 at 45 and 36, respectively. Valuations are even steeper for private defence companies, making investors vulnerable to corrections if expectations aren't met. Dr. Vikas Gupta, CEO of Omniscience Capital, said, 'The future of India's defence sector is undoubtedly bright. However, we urge investors to remain valuation-conscious. Much of the high growth has already been factored into stock prices, particularly in the short term.' Despite these cautionary signals, experts argue that the rally has legs over the long run. India's strategic ambitions—to become the world's third-largest economy by 2027–28 and a 7–8 percent contributor to global GDP—will require significant defence investment. The Indian Armed Forces are under pressure to modernize, especially with neighboring countries likely to boost their own defence spending in response to India's growing capabilities. Moreover, a strong fiscal position and global interest in India as a defence exporter could help sustain capex in the sector, while also creating tailwinds for listed players. Overall, the bull run in defence stocks has been driven by compelling macro themes: rising geopolitical risk, India's focus on self-reliance, and ambitious spending targets. However, with valuations running ahead of fundamentals in many cases, the question for investors is no longer whether defence is a growth story—it is how much of that growth is already in the price. Experts suggest a balanced approach: remain invested for the long-term transformation underway, but be selective and valuation-conscious in the short run. The next leg of the rally may belong not to the sector as a whole, but to the well-positioned companies with sustained earnings visibility. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Malaysia Sun
21-05-2025
- Business
- Malaysia Sun
Indian delegation takes part in opening ceremony of 17th LIMA 2025 exhibition in Malaysia
Langkawi [Malaysia], May 20 (ANI): An Indian delegation led by Raksha Rajya Mantri Sanjay Seth took part in the opening ceremony of the 17th edition of the Langkawi International Maritime and Aerospace Exhibition (LIMA 2025) in Langkawi, Malaysia, on Tuesday, the Ministry of Defence said in a release. The five-day event was inaugurated by the Prime Minister of Malaysia, Dato' Seri Anwar bin Ibrahim, and is being attended by global leaders and industry representatives from across the maritime and aerospace sectors. At the event, Sanjay Seth inaugurated the India Pavilion, which highlights the growing capabilities of India's indigenous defence industry. The pavilion features participation from key Defence Public Sector Undertakings (DPSUs) and private companies. Demonstrating India's increasing self-reliance in the defence sector, the pavilion showcases advanced technologies such as the BrahMos supersonic cruise missile and the Dornier aircraft manufactured by Hindustan Aeronautics Limited. India's well-curated presence among global defence leaders reflects its rising prominence in the field of indigenous defence production and innovation. During his visit, Raksha Rajya Mantri toured various exhibition stalls at the LIMA 2025 venue. He interacted with dignitaries and senior officials from several participating countries, exchanging views and reaffirming India's commitment to international collaboration in defence and aerospace. His meetings focused on strengthening existing ties and exploring new avenues for strategic cooperation in line with India's defence outreach goals. India and Malaysia share a strong and evolving bilateral relationship, with deepening engagements in defence and security. The relationship has been further strengthened under the Comprehensive Strategic Partnership, which was formally established during the Malaysian Prime Minister's visit to India in 2024. The partnership continues to expand across multiple strategic domains, including maritime cooperation, aerospace, and defence manufacturing. Adding further weight to India's participation at LIMA 2025, an Indian Naval Ship is also scheduled to take part in the event. Established in 1991 and held biennially, LIMA has grown into one of the largest and most significant maritime and aerospace exhibitions in the Asia-Pacific, bringing together leading global stakeholders in defence, technology, and innovation. (ANI)
India Gazette
20-05-2025
- Business
- India Gazette
Indian delegation takes part in opening ceremony of 17th LIMA 2025 exhibition in Malaysia
Langkawi [Malaysia], May 20 (ANI): An Indian delegation led by Raksha Rajya Mantri Sanjay Seth took part in the opening ceremony of the 17th edition of the Langkawi International Maritime and Aerospace Exhibition (LIMA 2025) in Langkawi, Malaysia, on Tuesday, the Ministry of Defence said in a release. The five-day event was inaugurated by the Prime Minister of Malaysia, Dato' Seri Anwar bin Ibrahim, and is being attended by global leaders and industry representatives from across the maritime and aerospace sectors. At the event, Sanjay Seth inaugurated the India Pavilion, which highlights the growing capabilities of India's indigenous defence industry. The pavilion features participation from key Defence Public Sector Undertakings (DPSUs) and private companies. Demonstrating India's increasing self-reliance in the defence sector, the pavilion showcases advanced technologies such as the BrahMos supersonic cruise missile and the Dornier aircraft manufactured by Hindustan Aeronautics Limited. India's well-curated presence among global defence leaders reflects its rising prominence in the field of indigenous defence production and innovation. During his visit, Raksha Rajya Mantri toured various exhibition stalls at the LIMA 2025 venue. He interacted with dignitaries and senior officials from several participating countries, exchanging views and reaffirming India's commitment to international collaboration in defence and aerospace. His meetings focused on strengthening existing ties and exploring new avenues for strategic cooperation in line with India's defence outreach goals. India and Malaysia share a strong and evolving bilateral relationship, with deepening engagements in defence and security. The relationship has been further strengthened under the Comprehensive Strategic Partnership, which was formally established during the Malaysian Prime Minister's visit to India in 2024. The partnership continues to expand across multiple strategic domains, including maritime cooperation, aerospace, and defence manufacturing. Adding further weight to India's participation at LIMA 2025, an Indian Naval Ship is also scheduled to take part in the event. Established in 1991 and held biennially, LIMA has grown into one of the largest and most significant maritime and aerospace exhibitions in the Asia-Pacific, bringing together leading global stakeholders in defence, technology, and innovation. (ANI)
News18
14-05-2025
- Business
- News18
India's Defence Exports Saw 34-Fold Increase To Rs 23,622 Crore Since Last Decade: Rajnath Singh
Last Updated: India's defence exports have increased from Rs 686 crore in the last decade to Rs 23,622 crore now, supplying a wide range of arms to 80 countries. Defence Minister Rajnath Singh on Wednesday said India's defence exports have increased 34-fold from Rs 686 crore in the last decade to Rs 23,622 crore in 2024-25, crediting Prime Minister Narendra Modi's vision of 'Atmanirbhar Bharat' for this achievement. 'India's defence sector is growing stronger than ever, driven by the spirit of Atmanirbhar Bharat. Defence exports have jumped from ₹686 crore in 2013-14 to ₹23,622 crore in 2024-25 — a 34-fold rise," Singh's office said in a post on X. India's defence sector is growing stronger than ever, driven by the spirit of Atmanirbhar Bharat. Defence exports have jumped from ₹686 crore in 2013-14 to ₹23,622 crore in 2024-25 — a 34-fold rise. — रक्षा मंत्री कार्यालय/ RMO India (@DefenceMinIndia) May 14, 2025 The rise in India's defence exports comes amid heightened tensions with Pakistan. As tensions soared over the Pahalgam terror attack last month, India launched Operation Sindoor on May 7, targeting terror camps in Pakistan and Pakistan-occupied Kashmir. Indian drones and missiles struck deep inside Pakistan, hitting nine terror camps and killing over a hundred terrorists. The Indian armed forces also retaliated to Pakistan's drone attacks by conducting precise strikes on 12 Pakistani air bases. India's successful military operation brought renewed attention to its indigenously developed weapons systems like Akash and BrahMos. In his address to the nation on Monday, PM Modi said Operation Sindoor proved the effectiveness of 'Made in India' defence equipment, and the world was now witnessing the arrival of Made in India arms as a formidable force in 21st-century warfare. The Defence Public Sector Undertakings (DPSUs) have shown a significant increase of 42.85% in their exports in the FY 2024-25, reflecting the growing acceptability of Indian products in the global market and the ability of the Indian defence industry to be a part of the global supply chain, according to an earlier Ministry of Defence (MoD) statement. A total of 1,762 Export Authorisation were issued in FY 2024-25 compared to 1,507 in the preceding year, registering a growth of 16.92%. The total number of exporters also grew by 17.4% in the same period. The Modi government has set an ambitious target of increasing defence exports to Rs 50,000 crore by 2029. The Government has brought in many policy reforms in the past few years to boost the Indian defence industry, such as simplification of industrial licensing procedure, removal of parts and components from the license regime, extending the validity period of the license, etc. First Published: May 14, 2025, 15:51 IST
