The Defence Acquisition Council (DAC) has approved proposals worth Rs 84,560 crore to enhance the operational capabilities of the Indian Armed Forces.
The proposals include New generation anti-tank mines, Air Defence Tactical Control Radar, Heavy Weight Torpedoes, Medium Range Maritime Reconnaissance & Multi-Mission Maritime Aircraft, Flight Refueller Aircraft & Software Defined Radios.
Here are some of the defence stocks that might be benefited from the above-approved proposals.
Hindustan Aeronautics
Hindustan Aeronautics Limited (HAL) is the Indian government’s prime manufacturer of defense machinery in the Aeronautic segment. The Company designs, develops, manufactures, maintains, and upgrades aircraft, helicopters, and critical aerospace components & accessories.
With a market capitalization of Rs. 2,02,114 Crores, the shares of Hindustan Aeronautics Limited closed at Rs. 3022.15, down 1.82 percent from its previous day’s close price of Rs. 3,078.25.
As of May 2023, Hindustan Aeronautics Limited has an order book worth Rs. 82,154 Crores, that consists of Manufacturing Contracts, Repair & Overhaul, Design & Development Projects, supply of spares, and exports.
It has a strong customer base that consists Indian Air Force, the Indian Navy, the Indian Coast Guard, ISRO, DRDO and Some of the international clients are Airbus Industries, Boeing, GE Aviation, Honeywell International, Rolls Royce Plc, and many more.
Its revenue from operations grew 9.37 percent from Rs. 24,620 Crores in FY22 to Rs. 26,928 Crores in FY23, accompanied by increasing profits of Rs. 5,086 Crores to Rs. 5,811 Crores.
It has reported a return on equity (ROE) of 27.2 percent and a return on capital employed (ROCE) of 30.6 percent, it is making good returns on its equity and capital employed.
Bharat Electronics
Bharat Electronics Limited is a Navratna central public sector enterprise that operates in the aerospace and defence sector, it primarily manufactures advanced electronic products for ground and aerospace applications.
With a market capitalization of Rs. 1,37,898 Crores, the shares of Bharat Electronics Limited closed at Rs. 188.65, up 0.29 percent from its previous day’s close price of Rs. 188.10.
Bharat Electronics Limited has an order book of Rs. 26,761 Crores and it expects the order book to reach Rs, 50,000 Crores in the next 2 years some of the clients from whom it receives orders are the Indian Space Research Organisation, Indian Army, Indian Navy, DRDO and others.
Its revenue from operations grew by 15.4 percent from Rs. 15,368.18 Crores in FY22 to Rs. 17,734.44 Crores in FY23, accompanied by increasing profits of Rs. 2,398.87 Crores to Rs. 2,984.42 Crores.
It has reported a return on equity (ROE) of 22.49 percent and a return on capital employed (ROCE) of 30.15 percent, it is making good returns on its equity and capital employed.
Bharat Dynamics
Bharat Dynamics Limited is engaged in the business of manufacturing and supplying missiles and allied defense equipment like torpedo advanced lightweight, medium-range surface-to-air missiles, quick reaction surface-to-air missiles, and many more.
With a market capitalization of Rs. 32,320 Crores, the shares of Bharat Dynamics Limited closed at Rs. 1,763.45, up 3.15 percent from its previous day’s close price of Rs. 1,709.60.
As of January 2024, it has a strong order book of 20,054 Crores and some of the clients from whom it gets orders are DRDO, Indian Air Force, several government organizations, and others.
Its revenue from operations declined by 11.64 percent from Rs. 2,817 Crores in FY22 to Rs. 2,489 Crores in FY23, accompanied by profits of Rs. 500 Crores to Rs. 352 Crores.
It has reported a return on equity (ROE) of 11.3 percent and a return on capital employed (ROCE) of 15.6 percent, it is making decent returns on its equity and capital employed.
Written by: Bharath K.S
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