HAL To Benefit The Most From The Recently Issued AoNs; Order Inflow For BEL Continues: ICICI Securities
Tickle down benefits for BEL likely apart from new orders worth Rs 30 billion.
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ICICI Securities Report
The Defence Acquisition Council has accorded the Acceptance of Necessity to nine capital acquisition proposals worth Rs 450 billion covering all the three armed forces.
We believe proposals such as Dhruvastra are likely to be fast tracked through emergency procurement, resulting in orders towards the end of the year.
We see Hindustan Aeronautics Ltd. to be the major beneficiary from the AoNs for 12 nos. Sukhoi-MKI aircraft and avionic upgradation of Dornier aircraft.
Besides, Bharat Electronics Ltd. has received orders worth Rs 30 billion. We continue to see the pace of AoNs and ordering not slackening even in the pre-election year.
We maintain BEL ('Buy'; target price: Rs 150), HAL ('Add'; target price: Rs 4,350) and Bharat Dynamics Ltd. ('Buy'; target price: Rs 1,325) as our preferred picks in the defence space.
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