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DAC ₹1.05-trn nod spurs defence stocks; Paras, Astra, BEML jump up to 9%

Defence stocks in focus: Shares of defence companies, including Paras Defence, Astra Microwave, and DCX Systems India among others surged up to 10 per cent in intraday trade on the NSE on Friday, July 4, 2025, following fresh procurement approvals by the government. The Nifty India Defence index gained as much as 1.76 per cent, to hit an intraday high of 9,012.60. At 10:51 AM, Nifty India Defence index was trading 1.45 per cent higher at 8,985.30 levels, while the benchmark Nifty50 was flat with a positive bias at 25,417.40. Among the key gainers, Paras Defence rose nearly 9 per cent, Astra Microwave surged 4.79 per cent to ₹1,109, while BEML jumped 4.53 per cent to ₹4,655. DCX Systems climbed 4.15 per cent to ₹288, and GRSE advanced 3.25 per cent to ₹3,038. Cochin Shipyard gained 2.90 per cent at ₹2,073.90, while Mazagon Dock rose 2.41 per cent to ₹3,367. Unimech Aerospace gained 2.27 per cent to ₹1,320, and Mishra Dhatu moved up 2.62 per cent to ₹442.40. Zen Technologies surged 3.41 per cent to ₹1,991.10, and Hindustan Aeronautics Ltd (HAL) inched up 1.43 per cent to ₹5,002. Other stocks included Bharat Dynamics (up 2.45 per cent to ₹2,013.50), Dynamatic Technologies (up 1.08 per cent to ₹7,278), BEL (up 1.44 per cent to ₹432.40). Cyient DLM (up 1.91 per cent at ₹489.30), MTAR Technologies (up 1.83 per cent to ₹1,613.50), Solar Industries (up 1.05 per cent to ₹17,000), and Data Patterns (up 1.97 per cent to ₹3,025.50). The sharp rally came after the Defence Acquisition Council (DAC), headed by Defence Minister Rajnath Singh, approved 10 major capital acquisition proposals on Thursday. The total value of these approvals is estimated at around ₹1.05 trillion, all through indigenous sources. These Acceptance of Necessity (AoN) approvals include procurement of Armoured Recovery Vehicles, an Electronic Warfare System, an Integrated Common Inventory Management System for the Tri-Services, and Surface-to-Air Missiles. The Ministry of Defence stated that the acquisitions aim to 'provide higher mobility, effective air defence, better supply chain management and augment the operational preparedness of the armed forces.' Ravi Singh, SVP of research at Religare Broking, commented, 'The DAC has taken another important step toward boosting India's self-reliance in defence manufacturing. The government's continued focus on manufacturing, along with rising defence budget allocations, is providing strong support to the sector. This creates long-term growth visibility for domestic defence companies, especially those with strong execution in aerospace, electronics, and missile systems.' Defence sector lift-off According to a note by InCred Equities dated June 23, India's defence sector is on the cusp of major transformation, driven by a record-high allocation of ₹6.81 trillion in the 2025–26 Union Budget, accounting for 13 per cent of total central expenditure. Over the past decade, defence spending has grown at a compound annual rate of 9 percent, underscoring a steady rise in investment. A notable 13 per cent increase in capital outlay this year highlights the government's strong focus on modernisation, with funding directed towards advanced weaponry, naval ships, aircraft, research and development, and key border infrastructure. This combination of sustained budgetary support and increased capital investment not only enhances operational capabilities but also fuels domestic innovation and strategic self-reliance, paving the way for long-term technological advancement and structural growth in the sector, analysts at InCred Equities said. Investment strategy On investment strategy, Singh added that investors can consider a buy-on-dips approach, as defence stocks have shown strong upward momentum over the last 3–4 months. He recommends focusing on quality stocks such as BDL, BEL, and HAL, especially those with healthy order books, improving margins, and strong operating leverage. Meanwhile, InCred Equities highlighted HAL as a clear beneficiary of indigenisation, with robust order inflows and strong revenue visibility. BEL, too, remains a top pick with a solid pipeline, proven execution, and rising export potential.