8 defence stocks to buy post Rs 79,000 crore DAC approvals

Antique Stock Broking on Friday said the Defence Acquisition Council’s (DAC) latest approvals worth Rs 79,000 crore mark another major milestone in India’s push for self-reliance in defence production. The proposals, cleared under various capital procurement categories of the Defence Acquisition Procedure (DAP-2020), aim to enhance the operational capabilities of the Indian armed forces, particularly the Navy and Air Force.

According to Antique, the DAC has so far granted Acceptance of Necessity (AoN) for proposals worth Rs 2.5 lakh crore in FY26 year-to-date, already surpassing FY25’s total approvals of Rs 2.2 lakh crore. The share of domestic procurement, it noted, has risen sharply from 54 per cent in FY19 to 92 per cent in FY25 — a development that significantly strengthens opportunities for domestic defence manufacturers such as PTC Industries, Mazagon Dock Shipbuilders (MDL), Hindustan Aeronautics (HAL), Bharat Electronics (BEL), Bharat Dynamics (BDL), and others.

The latest Rs 79,000 crore worth of approvals include key systems such as the Landing Platform Dock (LPD), Advanced Lightweight Torpedoes, a Collaborative Long-Range Target Saturation/Destruction System, the Nag Missile System (Tracked) Mk-II, and a Ground-Based Mobile ELINT System. Antique expects LPDs to form the largest component of this procurement, with potential contenders including MDL, Cochin Shipyard (CSL), L&T Shipbuilding, and Garden Reach Shipbuilders (GRSE). BEL and BDL, meanwhile, could benefit from orders related to ELINT systems and the Nag missile programme, respectively.

The brokerage highlighted that most of the AoNs have been accorded under the Buy (Indian–Indigenously Designed, Developed and Manufactured) category, which mandates a minimum of 50% indigenous content by cost. As per DAP-2020, this IDDM category enjoys the highest priority in defence procurements, ensuring sustained demand for domestic manufacturers.

India’s defence budget for FY25–26 stands at Rs 6.8 lakh crore (14 per cent of the Union Budget), up 10 per cent year-on-year, with Rs 1.8 lakh crore earmarked for capital acquisitions. Antique’s industry interactions suggest that funding will not constrain new acquisitions, and double-digit growth in capital expenditure is expected to persist. Further, the Ministry of Defence’s initiatives to streamline procurement — including the September 2025 revision of the Defence Procurement Manual and the upcoming DAP update by December 2025 — aim to reduce the time between AoN and contract award by addressing testing delays and improving readiness appraisals.

Defence stocks to buy

Antique expects strong earnings visibility and order inflows for defence PSUs and leading private players amid the expanding procurement pipeline. It maintains Buy ratings on

PTC Industries (Target price: Rs 19,016), BEL (Target: Rs 454), BDL (Target: Rs 1,951), HAL (Target: Rs 6,356), BEML (Target: Rs 4,921), Solar Industries (Target: Rs 16,600), Zen Technologies (Target: Rs 1,866 and Mazagon Dock Shipbuilders (Target: Rs 3,856).

The brokerage believes the sustained policy focus on indigenisation, consistent budgetary support, and faster procurement cycles will continue to drive a multi-year growth trajectory for India’s defence sector.