India Defence Story Still Has Legs: ICICI Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .ICICI Securities Report.Our perusal of the report from Standing Committee of Defence suggests: Budget allocation for the Indian Army is likely to pick up in FY25;Indian Navy’s tentative contracts to be awarded over FY24-FY25 imply limited opportunity for Mazagon Dock Shipbuilders Ltd. as compared to other shipyards;government of India’s focus on indigenisation has resulted in a significant increase in contracts to Indian vendors;capital allocation for domestic procurement in FY24 has been raised to 75% (versus 68% in FY23);there exists a lag in issue of Acceptance of Necessity and award of contracts by Ministry of Defence; andsufficient opportunities exist for domestic companies as 114 Multi-Role Fighter Aircrafts are expected to be procured from a foreign vendor, but will be assembled in India. We believe the India defence story still has legs. As against the grant of AoNs worth Rs 2.97 trillion during FY21-FY22, contracts worth only Rs 1.2 trillion have been awarded. Hence, we believe the pace of ordering is likely to pick up as contracts worth Rs 1.5 trillion remain to be awarded over next two-three years (excluding those awarded in March 2023). Based on the recent contracts awarded by MoD and the existing pipeline, we believe Bharat Electronics Ltd. is likely to be the primary beneficiary (among our covered companies) as its healthy orderbook would complement execution across the three services..Click on the attachment to read the full report:.Defence Sector Q4 Results Preview -Steady Execution, Exciting Prospects Ahead: ICICI Securities.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

India Defence Story Still Has Legs: ICICI Securities

Capital outlay likely to pick up, especially for Indian Navy and Indian Army.

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