Defence Stocks in Focus: DAC Clears Rs. 79,000-Crore Weapon Purchases to Boost Army, Navy and Air Force

Defence sector stocks are back in the spotlight after the Defence Acquisition Council (DAC) approved defence procurement proposals worth nearly Rs. 80,000 crore in its latest meeting held on December 29. The approvals are expected to strengthen the combat readiness of the Indian Army, Navy and Air Force.

The DAC meeting of 2025 was chaired by Rajnath Singh, and the decisions are expected to benefit several listed defence companies, including Bharat Electronics, Hindustan Aeronautics, and Zen Technologies, among others.

This was the fourth meeting of the Defence Acquisition Council (DAC) in 2025. Earlier this year, the council approved defence procurement proposals worth a cumulative Rs. 2.83 lakh crore across its March, July and October meetings.

What the DAC Approved This Time

The council cleared a wide range of proposals covering upgrades, new acquisitions and advanced weapon systems across the three services. According to PIB, the major highlight of the approvals is the procurement of loitering munitions because of the growing importance of drones in recent times.

According to the official release by the Ministry of Defence, below is a list of approvals by the DAC:

For the Indian Army:

Overhaul of T-90 tanks
Loiter munition systems for artillery regiments
Low-level lightweight radars
Long-range guided rocket ammunition for the Pinaka Multiple Launch Rocket System (MRLS)
Integrated Drone Detection & Interdiction System (IDDIS) Mk-II

For the Indian Air Force:

Automatic Take-off and Landing Recording Systems
Astra Mk-II air-to-air missiles
Full Mission Simulators
SPICE-1000 long-range guidance kits
Mid-life upgrades of Mi-17 helicopters

For the Indian Navy:

The DAC approved procurement of:
Medium Range Surface-to-Air Missiles (MRSAM)
Bollard Pull (BP) tugs
High Frequency Software Defined Radio (HF SDR) manpacks
Leasing of High Altitude Long Endurance (HALE) Remotely Piloted Aircraft Systems (RPAS)

Impact on Defence Stocks

Post the DAC approvals, defence sector stocks are in focus today, particularly companies involved in electronics, missiles, platforms and precision systems.

Goldman Sachs said, as reported by ETNOW, "The DAC has approved proposals worth Rs. 79,000 crore, covering all three armed forces. are strategically important as they address key gaps in India's defence preparedness. Cumulative Acceptance of Necessity in FY26 stands at Rs. 3.3 trillion, close to the all-time high of Rs. 3.8 trillion in FY24." It added, The steep trajectory of AoNs since FY23 implies that the pace of ordering is likely to accelerate."

On stock-specific impact, Goldman Sachs stated, "We expect Solar Industries, Bharat Electronics and Bharat Dynamics to be the key beneficiaries." It also added, "Trickle-down benefits are likely to accrue for Astra Microwave and Data Patterns as well."

Motilal Oswal In its report, it pointed out, "FY26 year-to-date approvals are at approximately Rs. 3.3 trillion, nearly two times the defence capital outlay of Rs. 1.8 trillion. Approvals span munitions, missiles, air defence, surveillance, training systems and naval platforms. "While AoNs do not mean immediate orders, the scale de-risks order inflows for defence PSUs and select private players over the next two to four years."

From an investment perspective, MOFSL noted, "We maintain a positive stance on BHEL (target price Rs. 500), HAL (target price Rs. 5,800), BDL (target price Rs. 2,000) and Astra Microwave (target price Rs. 1,100)."

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