Mazagon Dock, GRSE, other defence stocks gain as DAC greenlights procurements worth Rs 1.44 lakh cr

The Defence Acquisition Council (DAC) is one of the highest authorities for approving major capital purchases for the Armed Forces. In its latest meeting, it granted Acceptance of Necessity (AoN) for 10 capital acquisition proposals.

Defence stocks Hindustan Aeronautics, Bharat Dynamics, and Mazagon Dock are in focus on September 4 after the Defence Acquisition Council (DAC) approved major procurements worth Rs1,44,716 crore for the Armed Forces.

The approved projects include Future Ready Combat Vehicles (FRCVs) and Air Defence Fire Control Radars for the Army, along with Dornier 228 aircraft, Next Generation Fast Patrol Vessels, and Offshore Patrol Vessels for the Indian Coast Guard.

Mazagon Dock and Garden Reach Shipbuilders (GRSE) gained up to 1.5 percent. HAL and Bharat Dynamics shares were trading flat. Mishra Dhatu Nigam and Bharat Electronics (BEL) were also trading in the green.

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Antique Broking has maintained a 'buy' call on HAL, BEL, Bharat Dynamics, Mazagon Dock, and Garden Reach Shipbuilders. The firm views the recent approval of defence proposals worth Rs 1.44 lakh crore as feasible, noting that most of these projects will be sourced from the domestic industry. This development presents a significant opportunity for Indian defence manufacturers.

Chaired by Defence Minister Rajnath Singh, the Defence Acquisition Council (DAC) is one of the highest authorities for approving major capital purchases for the Armed Forces. In its latest meeting, the DAC granted Acceptance of Necessity (AoN) for 10 capital acquisition proposals, according to the Defence Ministry.

An AoN marks the initial step in the lengthy defence procurement process, but it doesn't guarantee a final order. Notably, of the total cost of AoNs, 99 percent is from Indigenous sources under the Buy (Indian) and Buy (Indian-Indigenously Designed Developed and Manufactured) categories.

Proposals to acquire three major capabilities of the Indian Coast Guard were also approved. This includes more Dornier 228 aircraft, Next Generation Fast Patrol Vessels having high operational features in rough weather conditions and Next Generation Offshore Patrol Vessels with advanced technology and enhanced long-range operations.

The long-awaited procurement of Future Ready Combat Vehicles (FRCVs) is set to modernize the Indian Army's tank fleet. These advanced Main Battle Tanks will offer superior mobility, all-terrain capability, multi-layered protection, precision targeting, lethal firepower, and real-time situational awareness, the Ministry said in a statement.

Additionally, the Air Defence Fire Control Radars will enhance the detection and tracking of aerial targets, providing accurate firing solutions. The proposal has been approved for the Forward Repair Team (Tracked), which has suitable cross-country mobility for carrying out in situ repair during mechanised operations, the Defence Ministry said.

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