HAL, Bharat Electronics, Bharat Dynamics: 4 key factors that keep 2024 outlook firm for Defence PSUs as per Antique

Outlook 2024: The Defence sector companies riding the wave of strong growth led by favorable government policies on “Make in India" and "Atmanirbhar Bharat" initiative have seen strong gains in their share prices during 2023. Share prices of Ltd, Ltd, Ltd saw gains of 81 121% during 2023.

The order flows remain strong keeping outlook firm moving forward too. Analysts at Antique Stock Broking in their report have said that Calendar year 2023 ended on a high note, setting a bullish tone for Calendar year 2024. With defence production and exports expected to reach all time high levels in FY24, the sector is all set to experience an equally strong FY25.

Here are four fundamental reasons why Antique Stock Broking expects more gains To enhance the operational preparedness of the armed forces, DAC has approved AoN worth 3.5 trillion as against 2.6 trillion in FY23 leading to 35% YoY growth. Defence production in India for FY23 stood at more than 1 trillion and the government’s intent is to further boost domestic production to 1.5 trillion in FY24.

Multiple policy initiatives set by government to ramp up domestic production include reserving 75% of the defence capital procurement budget for the domestic industry in FY24, up from 68% in FY23; Issuing five positive indigenization list, products under which will be banned from imports and Integration of MSMEs and start ups into the defence supply chain.

: Export is one of the key focus areas and multiple steps have been taken to scale it up. Exports have reached 160 billion in FY23 (10 times since FY17). it is further expected to reach 200 billion (up 26% YoY) in FY24. : Two Defence Industrial Corridors (DIC) have been established in Uttar Pradesh and Tamil Nadu to boost the defence manufacturing ecosystem in the country with the intent to attract investments of 100 crore in each Defence Industrial Corridors.

Analysts at Antique said that the Defence PSUs benefit immensely as Ministry of Defence goes on order finalization drive. MoD has placed multiple large ticket orders with defence PSUs which has helped Defence public sector undertakings (DPSUs) like Hindustan Aeronautics , Bharat electronic, Bharat Dynamics to further bolster their already strong order book and meaningfully increase revenue visibility for years to come.

They continue to believe in the robust ordering prospects which is expected to play out in the medium term as India looks to modernize its armed forces and also scale up exports with emphasis on Make in India Livemint tops charts as the fastest growing news website in the world to know more. Unlock a world of Benefits! From insightful newsletters to real time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away!.