Paras Defence, ideaForge, other defence stocks slide up to 5%. What’s triggering the selloff?
The rally on Monday came after the Defence Acquisition Council (DAC) approved capital acquisition proposals worth about Rs 52,000 crore. The approvals span a range of procurements aimed at enhancing the operational capabilities of the Army, Navy and Air Force, including air defence systems, anti-drone technologies, surveillance equipment and unmanned warfare platforms.
Among individual stocks, Data Patterns declined 5% to Rs 4,390, while Paras Defence fell nearly 5% to Rs 1,294 on the BSE. ideaForge also dropped 5% to Rs 812, while Bharat Dynamics slipped over 2% to Rs 1,375. Mazagon Dock and Cochin Shipyard were down as much as 3% during the session.
Also read: DAC clears Rs 52,000 crore defence acquisitions, boosts drone and air defence capabilities
DAC Approval
The latest approvals span several indigenous and advanced defence platforms across the three armed services, with a focus on improving preparedness against emerging aerial and mechanised threats.
For the Indian Army, the DAC cleared the procurement of the Anti-Unmanned Aerial Vehicles (UAV) Electronic Warfare System ‘AKASH TARANG’, Man Portable Anti-Tank Guided Missile (MPATGM) Systems, Medium Range Surface-to-Air Missile (MRSAM) Weapon System, Very Short Range Air Defence System (V-SHORADS), Active Protection System for Tanks and the Jet-Based Kamikaze Drone System.
For the Indian Navy, approvals were granted for the procurement of the Multi-Influence Ground Mine (MIGM), Naval Shipborne Unmanned Aerial System (NSUAS) and the establishment of a Land-Based Testing Facility (LBTF) for Electric Propulsion Systems.
For the Indian Air Force, the council approved the acquisition of a Fixed-Wing Based High Altitude Pseudo Satellite (FW-HAPS), along with other proposals. According to the ministry, the FW-HAPS platform will provide persistent intelligence, surveillance and reconnaissance (ISR), telecommunications, and remote sensing capabilities, strengthening the Air Force’s operational reach and endurance.
What are experts saying?
“This is likely to accelerate order inflows and execution for defence companies, as a larger share of procurement contracts can now be approved directly by the armed forces,” domestic brokerage Motilal Oswal said.
The brokerage has maintained its ‘Buy’ rating on HAL with a target price of Rs 5,500, implying an upside of 24% from current levels. It expects the company’s revenue to grow 9% year-on-year, supported by healthy execution of its opening order book. Investors will closely watch updates on deliveries of the Tejas Mk1A and HTT-40 aircraft, the partnership with GE for engine manufacturing and the working capital cycle.
Read more: Lessons from Op Sindoor: DAC nod to pseudo satellites, air defence systems, jet-based drones
Motilal Oswal has also reiterated its ‘Buy’ rating on Astra Microwave. The brokerage expects revenue to rise 13% year-on-year in the first quarter of FY27, with execution likely to gather pace on the back of an order book of around Rs 2,600 crore. Key monitorables include fresh ordering across larger platforms, margin sustainability and export opportunities.
For Bharat Electronics, the brokerage has retained its ‘Buy’ recommendation with a target price of Rs 510, suggesting a potential upside of 23% from current levels. It expects revenue to grow 16% year-on-year, driven by the execution of the company’s opening order book of about Rs 74,000 crore. Analysts will monitor updates on major orders, including QRSAM, Uttam radars, next-generation corvettes, P75I submarines and the progress of the AMCA programme.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
