HAL, BEL, Bharat Dynamics among top gainers after green light for drones, radars, and missile systems
India’s defence ambitions just got a ₹67,000 crore push—and the stock market noticed.
Shares of Hindustan Aeronautics Ltd (HAL), Bharat Electronics Ltd (BEL), Bharat Dynamics Ltd, and BEML surged Wednesday morning after the Defence Acquisition Council (DAC), led by Defence Minister Rajnath Singh, approved a slate of big-ticket military procurement proposals. These projects are expected to boost India’s battlefield capabilities, particularly in mountain warfare and advanced surveillance.
Big Orders, Bigger Expectations
It’s not every day that the government clears defence upgrades worth billions of dollars in one sitting.
The DAC’s clearance includes long-endurance drones, high-altitude radars, missile systems, and advanced thermal imaging for armoured vehicles. All projects will be sourced from domestic manufacturers under the “Buy (Indian)” or “Buy and Make (Indian)” categories, giving a direct boost to Indian defence players.
“Every rupee spent here goes straight into local companies,” said an MoD official familiar with the approvals. “This isn’t just about capability, it’s about building up the domestic industry.”
Stocks Rally on Defence Optimism
Traders were quick to react. Defence counters popped across the board on the BSE and NSE, with many outperforming the benchmark indices by a wide margin.
Here’s how the key stocks moved by mid-morning:
| Company | Price Movement (as of 10:30 am IST) | Recent Catalysts |
|---|---|---|
| HAL | +5.8% | Drone and radar production |
| BEL | +4.1% | Mountain radar, electronics contracts |
| Bharat Dynamics Ltd | +6.2% | Missile system orders |
| BEML | +3.9% | Supply of military-grade mobility units |
| Paras Defence | +5.4% | Likely radar subsystem supplier |
One fund manager at a Mumbai-based PMS firm said, “The defence story is one of the few consistent government narratives. Every approval cycle like this adds more confidence.”
Army, Air Force, Navy: Everyone Gets a Slice
The projects approved cover all three branches of the armed forces.
For the Army, a key approval was for thermal imager-based night sights for BMP infantry vehicles. This will let soldiers maneuver more effectively at night in border areas like Ladakh and Arunachal Pradesh—regions that have seen rising tensions in recent years.
The Air Force is set to receive long endurance drones for extended surveillance missions, possibly derived from the indigenous TAPAS-BH drone platform. Meanwhile, the Navy is looking at high-altitude surveillance systems and communication upgrades for forward-deployed warships.
Here’s a quick rundown of the defence priorities approved:
• Thermal sights for armoured mobility
• Long-endurance drones for extended ISR missions
• Missile systems to enhance deterrence
• Mountain radars for border surveillance
• Communication and combat network upgrades
An MoD statement emphasized “full support to domestic defence industry,” in line with India’s “Atmanirbhar Bharat” push.
Domestic Manufacturing: More Than Just Optics
This isn’t just a budget story—it’s a manufacturing story too.
The government insists that nearly all components will be sourced from Indian firms, part of its multi-year effort to reduce reliance on foreign imports. In FY2024 alone, India spent $10.3 billion on foreign defence equipment—down from $13.1 billion in FY2022, but still significant.
“Until a few years ago, we were importing even basic surveillance systems,” said Ankur Mishra, a senior analyst at ICICI Securities. “Now BEL and HAL are in global supply chains.”
One sentence, short and sharp:
India wants to buy Indian—and sell global.
Investors Bet on Long-Term Defence Growth
It’s not just the traders chasing short-term pops. Mutual funds and long-only investors are quietly building stakes in defence players too.
According to NSE bulk data from Q1FY26:
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HAL saw a 2.4% increase in mutual fund holdings
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BEL attracted three new foreign institutional investors
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Paras Defence has added 18,000 new retail shareholders since April
One smallcap fund manager said, “The defence cycle is just getting started. It’s not about next quarter—it’s about the next five years.”
That optimism is rooted in more than just policy. India is now the third-largest military spender in the world, behind only the U.S. and China. And with regional tensions simmering—from the Himalayan border to the Indian Ocean—defence is unlikely to slip from the agenda.
What Happens Next?
Clearances don’t always translate into quick orders. But the fact that these projects were approved under Acceptance of Necessity (AoN) suggests execution will now move faster.
Defence PSU executives say request for proposals (RFPs) for most systems could be floated in Q3 or Q4 FY26. Given HAL and BEL’s prior experience, analysts expect them to bag the lion’s share.
