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Mint
9 hours ago
- Business
- Mint
NATO defence budget hike: HAL, BEL, BDL, Paras Defence, Ideaforge, others to benefit. How many of these you own?
Defence stocks rallied on Thursday buoyed by expectations of increased export orders after NATO leaders pledged to scale up defence spending. Data Patterns (India), Astra Microwave Products, Hindustan Aeronautics (HAL), Bharat Electronics (BEL), Zen Technologies, among other defence stocks rallied up to 4%. The upbeat sentiment in defence stocks lifted the Nifty India Defence index by nearly 1.5%, with most of its constituents trading in the green. The surge in sentiment follows the North Atlantic Treaty Organisation (NATO) leaders' declaration at the Hague Summit, where member states reaffirmed their 'ironclad commitment' to collective defence. They pledged to invest up to 5% of their GDP annually in defence and security-related sectors by 2035. This includes a minimum of 3.5% allocated to core defence capabilities and up to 1.5% for the protection of critical infrastructure. Analysts believe the development could open up significant export opportunities for Indian defence manufacturers. 'If NATO members indeed raise defence spending to 5% of GDP—a substantial increase from current levels—it could significantly reshape global defence procurement dynamics. For India, which is rapidly expanding its defence manufacturing and exports, this shift presents both commercial opportunities and strategic implications,' said Prashanth Tapse, Research Analyst at Mehta Equities Ltd. 'India, with its lower production costs and improving indigenous capabilities, could emerge as an attractive secondary supplier for NATO countries,' he added. Echoing similar views, Krishna Doshi, Research Analyst at Ashika Institutional Equities, said the move opens up substantial export opportunities for Indian defence companies. 'Indian firms already supply a wide range of products including arms, ammunition, fuses, complete weapon systems like the BrahMos supersonic cruise missile, artillery guns, Dornier-228 aircraft, radars, Akash air defence systems, Pinaka rockets, armoured vehicles, as well as protective equipment and uniforms.' Among NATO's 32 member nations, the United States and France are already significant markets for Indian defence exports, she noted. 'Moreover, the Indian government's policy push to promote indigenous defence systems and its ambitious goal of achieving ₹ 50,000 crore in defence exports by FY29 further strengthens the sector's outlook,' Doshi said. Bhavika Joshi, Business Head, INVasset PMS believes that as Western OEMs face capacity constraints, India's defence industry is emerging as a credible and cost-effective partner to plug these gaps. 'From radars and electronics to artillery and ammunition, Indian companies are now part of global defence supply chains. Bharat Forge recently exported 100 155 mm artillery guns to a European country and signed an LOI to supply howitzers to the US Army — milestones that mark India's entry into NATO-aligned heavy weapons markets,' said Joshi. BEL, through its JV with Thales, is supplying components for Rafale radars used in Europe, while Solar Industries is reportedly in talks to supply Pinaka rockets to France amidst ammunition shortages, Joshi added. Tapse identified potential beneficiaries among Indian defence stocks, including Bharat Electronics (BEL) — which specialises in radar systems, communications, and electronic warfare — along with HAL, Bharat Dynamics (BDL), and Data Patterns (India), a niche player in defence electronics and embedded systems. Doshi pointed to Data Patterns India, Zen Technologies, Paras Defence & Space Technologies, Astra Microwave Products, Ideaforge Technology, HAL, BEL and Bharat Dynamics as key stocks that may benefit from the rising global defence expenditure. 'Further, given the prevailing geopolitical tensions, increased defence spending, and the government's emphasis on indigenization and exports, the overall outlook on the defence sector remains positive,' she said. According to Joshi, what's unfolding is a medium-term export supercycle for Indian defence firms—across public and private sectors, and across market caps. 'HAL, BEL, BDL, and Mishra Dhatu Nigam are backed by government credibility and global tie-ups, while private players like Bharat Forge, Solar, Data Patterns, and Dynamatic are showing product readiness and delivery capacity. Many already supply to NATO-aligned primes like Boeing, Airbus, and Lockheed Martin,' Joshi said. 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.
Time of India
09-05-2025
- Business
- Time of India
Defence stocks set to rally on export hopes amid rising India-Pakistan tensions: Ashika Equity
Indian defence stocks are poised to benefit from a surge in both domestic and international demand, brokerage Ashika Institutional Equity said, citing a favourable backdrop of heightened geopolitical activity, expanding order books, and growing export potential following India's assertive display of military capabilities in the ongoing conflict with Pakistan. The brokerage is bullish on select domestic manufacturers, including Data Patterns, Bharat Electronics (BEL), Mazagon Dock, Garden Reach Shipbuilders, Zen Technologies , Paras Defence , and Hindustan Aeronautics (HAL), which it says are well-positioned to benefit from an expanding order book. The year 2025 is shaping up to be a year of reforms for the defence sector, Ashika Equities said, pointing to India's demonstrated strength in next-generation stand-off warfare and the integration of advanced systems such as AI and robotics. The brokerage said both public sector undertakings and private manufacturers stand to gain—PSUs from rising domestic procurement, and private players from increasing global interest. India's recent military actions, including precision strikes on terror camps in Pakistan and Pakistan-occupied Kashmir, have not only showcased indigenous systems like the Akash missile platform and the INS Vikrant aircraft carrier but also exposed vulnerabilities in Chinese-supplied hardware used by Pakistan. 'Operation Sindoor delivered a resounding blow to the credibility of Pakistan's Chinese-supplied air defence systems and, by extension, to Beijing's claims of military superiority,' said Krishna Doshi, Defence Analyst at Ashika Institutional Equity, adding that this could unlock new export opportunities for Indian companies. Defence Minister Rajnath Singh, in a recent briefing, reiterated India's export target of Rs 500 billion by FY29—more than double the current Rs 240 billion—with the ambition of becoming the world's top defence exporter by 2047. Defence stocks surged on Friday, with Paras Defence leading the gains with a 7.5% jump to an intraday high of Rs 1,463, followed by BEL, which rose 4.9%, and HAL, which climbed 3.6%. Bharat Dynamics and Bharat Forge gained 3.5% and 5.6%, respectively. The rally comes amid reports that the Modi government has summoned key defence manufacturers to Delhi next week to discuss ramping up production. Bharat Forge Chairman Baba Kalyani confirmed the meeting in comments to CNBC TV18, though declined to elaborate. The stock movement tracks developments in the region following India's strikes earlier this week that eliminated nine terror camps. In retaliation, Pakistan launched loitering munitions and resumed missile attacks across the Line of Control, all of which were intercepted by India's air defence systems. Explosions were reported as drones were neutralised across Jammu and Kashmir, while blackouts were enforced in multiple districts, including Bikaner and Jalandhar. Also read | Defence stocks rally up to 4% as India-Pakistan tensions flare Ashika Equities also pointed to global defence spending as a long-term positive for Indian exporters. NATO's planned EUR 800 billion outlay over the next 3–4 years and the recent Rs 630 billion Rafale-M deal between India and France—under which local firms will manufacture key components—underscore the opportunity for Indian players, particularly those in the private sector which already account for 60–65% of defence exports. ETMarkets WhatsApp channel )
