HAL shares surged 7% on Tuesday after the DAC cleared a ₹2.12 lakh‑crore capital acquisition package for the armed forces—its first such approval since the last fiscal quarter. The move lifted the Nifty India Defence index by almost 3%, with Apollo Micro Systems leading the gains at 8.7% and Data Patterns up 8.1%—both benefiting from the same clearance. Paras Defence and Astra Microwave Products followed with 7.3% and 5.9% gains, respectively, while MTAR Technologies hit its 5% upper circuit limit, signalling a sector‑wide rally.
Among public sector undertakings, Mishra Dhatu Nigam, Hindustan Aeronautics, Bharat Electronics, BEML and Mazagon Dock Shipbuilders climbed between 3% and 4%, reflecting investor optimism over the new procurement pipeline. The DAC’s approval covers artillery, mobility platforms, helicopters, air‑defence and counter‑drone systems, surveillance UAVs, integrated strike systems and long‑range kamikaze drones, adding depth to the defence order book.
This clearance follows earlier approvals of ₹52,000 crore in July and ₹1.1 lakh crore in September, bringing the cumulative Acceptance of Necessity approvals for FY27 to ₹3.84 lakh crore. Sector analysts note that the cumulative value places India in a strong position to meet its strategic autonomy goals, potentially boosting long‑term capital expenditures across the defence value chain.
Key beneficiaries are set to include Bharat Electronics, Astra Microwave Products and Data Patterns for gun‑shot response systems, BEL for high‑mobility vehicles, and L&T and Bharat Forge for self‑propelled tracked gun systems. Hindustan Aeronautics is linked to light multi‑role helicopter contracts, while Bharat Dynamics, BEL, L&T and Astra are earmarked for very short‑range air‑defence solutions. Zen Technologies, BEL and Paras Defence are positioned for counter‑unmanned aerial systems, and Bharat Forge alongside Solar Industries India could win contracts for long‑range kamikaze drones.
Looking ahead, the defence sector expects further DAC approvals as the government pushes to replace aging equipment. Investors should monitor the next quarterly earnings releases from HAL and its peers, especially as the Ministry of Defence publishes procurement timelines for the upcoming fiscal year.