DAC Approves ₹540 Billion in Purchases, Potentially Boosting Stocks of Bharat Dynamics, Bharat Electronics, and HAL. Investors Should Remain Vigilant!
Stock Market Today: The Indian stock market performed bly this week. Both the Nifty 50 and Sensex indices saw significant gains on Thursday. Investors will be closely watching the market's performance on Friday, the last trading day of the week.
Why the Focus on Defense Stocks on Friday?
After the market closed on Thursday, the Defence Acquisition Council (DAC) approved the procurement of ₹540 billion worth of defense equipment. This decision will further strengthen the capabilities of the Indian Army, Air Force, and Navy.
Significant Decision for the Indian Army
- The purchase of 1350 horsepower engines for T-90 tanks was approved.
- Currently, the Indian Army utilizes 1000 horsepower engines.
- The new engines will enhance the Army's operational capabilities in high-altitude regions.
Advanced Weaponry for the Indian Navy
- The Varunastra torpedo, an advanced ship-launched anti-submarine weapon, received approval.
- This will significantly bolster the Indian Navy's anti-submarine warfare capabilities.
Modern Aircraft Systems for the Indian Air Force
- A new airborne early warning and control aircraft system will be procured for the Indian Air Force.
- This acquisition will enhance the Air Force's radar and surveillance capabilities.
Defense Stocks to Watch
This decision is likely to trigger a surge in defense sector stocks. Investors should monitor the following companies:
Bharat Dynamics Limited (BDL) – This company manufactures the Varunastra torpedo.
Bharat Forge – Plays a significant role in the defense and aerospace sectors.
Bharat Electronics Limited (BEL) – Manufactures defense electronics and communication equipment.
Hindustan Aeronautics Limited (HAL) – This company manufactures aircraft and helicopters for the Indian Air Force.
These companies already saw gains on Thursday, and further increases are anticipated on Friday.
What is the DAC?
The Defence Acquisition Council (DAC) is the apex body in India responsible for making capital acquisition and policy decisions related to the three armed forces (Army, Navy, Air Force) and the Coast Guard.
- It is chaired by the Indian Defence Minister (Rajnath Singh).
- It was established in 2001, following the Kargil War (1999).
- Its primary objective is to improve the national security system.
