Defence sector firms set for gains as India pushes indigenous manufacturing

Companies like BEL, BDL and HAL have strong order books and are prepping for the export market, say analysts

A strong June quarter performance, expansion of indigenisation list, the potential for higher exports, and valuations are positive triggers for listed defence sector companies. Their stocks were rerated over the last year, with Bharat Electronics (BEL) and Hindustan Aeronautics (HAL) rising 68-72 per cent and Bharat Dynamics (BDL) doubling over this period. Given the triggers, the momentum is expected to continue.

The immediate trigger is the expansion of the list of items the government announced last week domestic companies will manufacture in a move aimed at curbing defence imports. This is sixth list of 780 items comprising components, subsystems and