Archive · 8 Sep 2026
Defence Stocks Rally After ₹1.1 Lakh Crore DAC Approvals
The government approved plans to buy about ₹1.1 lakh crore worth of defence equipment.
The equipment will be used by the Army, Navy and Air Force.
It includes special vehicles, helicopters, radars, bridge systems and equipment that can block enemy radar signals.
Most of the purchases, about 98%, are expected to be made from Indian companies.
Investors reacted by buying shares of several defence companies.
As a result, the defence stock index rose while the wider stock market fell.
MOFSL continued to recommend buying shares of BEL, HAL and Astra Microwave.
It gave neutral ratings to BDL and Zen Tech, meaning it did not strongly recommend buying or selling them.
The Defence Acquisition Council approved military procurement proposals worth about ₹1.1 lakh crore on 7 September 2026.
The approvals cover equipment and systems for the Indian Army, Navy and Air Force.
About 98% of the approved procurements are expected to come from Indian industry.
Defence shares rallied on 8 September, with the Nifty India Defence Index gaining 1.3% while the Nifty fell 0.4%.
MOFSL retained buy ratings for BEL, HAL and Astra Microwave, and neutral ratings for BDL and Zen Tech.
- Who
- The Defence Acquisition Council, chaired by Defence Minister Rajnath Singh, approved the proposals; MOFSL assessed several defence companies.
- What
- The council granted Acceptance of Necessity for defence procurement proposals worth about ₹1.1 lakh crore, while defence stocks rallied and MOFSL maintained its ratings and targets.
- When
- The approvals were granted on 7 September 2026, and the market reaction occurred on 8 September 2026.
- Where
- The proposals cover the Indian Army, Indian Navy and Indian Air Force, with procurement primarily from Indian industry.
- Why
- The approvals are intended to strengthen military capabilities, improve mobility and surveillance, support electronic warfare and reduce dependence on foreign vendors.
Positive Sector View
Neutral Stock View
Investment recommendations
Positive Sector View
MOFSL maintained buy ratings for Bharat Electronics Ltd, Hindustan Aeronautics Ltd and Astra Microwave Products Ltd, and identified Bharat Electronics as its preferred pick.
Neutral Stock View
MOFSL maintained neutral ratings for Bharat Dynamics Ltd and Zen Tech despite retaining their target prices.
Impact of procurement approvals
Positive Sector View
MOFSL said the approvals expand the addressable market for domestic defence companies and could improve visibility for future order inflows.
Neutral Stock View
The brokerage noted that large tenders still need to be finalised, meaning the approved proposals do not themselves represent completed orders.
- Total approval value
- About ₹1.1 lakh crore
- Domestic procurement share
- Approximately 98% of the procurements are expected to come from Indian industry
- Defence index performance
- The Nifty India Defence Index gained 1.3% on 8 September 2026
- BEL target and rating
- ₹530 target price; buy rating maintained
- HAL target and rating
- ₹5,800 target price; buy rating maintained
- BDL target and rating
- ₹1,270 target price; neutral rating maintained
- Astra Microwave and Zen Tech
- Astra Microwave: ₹1,900 target and buy rating; Zen Tech: ₹1,600 target and neutral rating
