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Kolkata: The defence sector in India is continuously in the news since it is expanding with active and increasing participation by the private sector. PSUs and private sector firms are not only producing defence equipment and software not only for the domestic sector but also for buyers abroad. Here we have a close look at three stocks which are in a vantage position to take advantage of the rising defence expenditure of the government.
The Defense Acquisition Council of the Ministry of Defense has recently approved a plan to procure defence hardware worth Rs 79,000. It augurs well for these companies which are well positioned to take advantage of this loosening of purse strings. These stocks are Bharat Dynamics, Bharat Heavy Electricals and Mazagon Dock Shipbuilders. But surely other stocks will benefit too as they can also benefit from this expenditure. This new business opportunity can eventually result in a surge in these stocks thinks Elara Securities.
Bharat Dynamics can directly benefit from the decision to procure Nag Missile System (Tracked) Mk-II (NAMIS), an anti-tank guided missile platform. Bharat Dynamics is the key manufacturer of guided missile systems. It is worth about Rs 2,000 crore. The Bharat Dynamics stocks was trading at Rs 1,531.00, up Rs 16.20 (or 1.07%) on October 24 afternoon. This stock has generated delivered a robust return of more than 220% in three years and about 900% in five years.
The size of the order book of Bharat Dynamics was about Rs 23,029 crore at the end of Q2. It is higher than the Rs 22,814 crore recorded at the end of FY25. In August 2025, the company won new orders of about Rs 895 crore.
Indian Navy will be spending about Rs 60,000 crore which includes the Landing Platform Dock program which will be great use in disaster relief and at times of war. This procurement can majorly benefit companies such as Mazagon Dock Shipbuilders, Cochin Shipyard, Garden Reach Shipbuilders & Engineers and L&T. The Navy will also procure the 30 mm Naval Surface Gun and 76 mm Super Rapid Gun Mount. This can benefit BHEL and Garden Reach Shipbuilders & Engineers stocks.
Bharat Dynamics can also benefit from another procurement. Advanced Light Weight Torpedoes will be procured for underwater warfare and this could amount to Rs 500-1,000 crore. BEL or Bharat Electronics can benefit from the procurement of Electro-Optical Infra-Red Search and Track System, which will also be done by the Navy. Astra Microwave and Data Patterns stocks can also benefit from this procurement.
On October 24 afternoon, Mazagon Dock Shipbuilders stock was trading at Rs 2,800.50, down Rs 9.50 (or 0.34%). Cochin Shipyard stocks were quoting at Rs 1,808.10, up Rs 15.70 (or 0.88%). Larsen & Toubro shares are currently trading Rs 3,910.70, down Rs 8.00 (or 0.20%). Garden Reach Shipbuilders & Engineers was trading at Rs 2,607.10, down Rs 3.10 (or 0.12%) while Data Patterns shares were trading at Rs 2,801.80, up Rs 3.90 (or 0.14%).
The size of the Mazagon Dock order book is about Rs 40,000 crore and the management wants to take it to Rs 1.25 lakh crore by the end of FY26. BEL of Bharat Electronics order book is higher than Rs 71,600 crore. In September, it won fresh orders worth Rs 1,092 crore.
(Disclaimer: (Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, REITs, INVITs, any form of alternative investment instruments and crypto assets.))
