DEFENCE INDUSTRIAL POLICY
From Telugu actor to PM’s former office member, meet the eclectic Indian School Of Business MBA batch!
The new cohort of students in the Post Graduate Programme at the Indian School of Business broke away from the usual engineers and commerce graduates. This diverse group included public servants, former members of the Prime Minister's Office, and even a Tollywood (Telugu cinema) actor!
Work contracts on GeM mulled, platform to become world’s largest govt procurement portal
GeM, led by CEO Prashant Kumar Singh, aims to surpass South Korea’s KONEPS by integrating construction contracts. FY24 procurement hit Rs 4 lakh crore, and FY25 Q1 reached Rs 1.24 lakh crore, with ministries and CPSEs, contributing Rs 91,000 crore. Nearly completed stakeholder consultations focus on a Unified Procurement System. MSME transaction charges were lowered to 0.3% with a Rs 3 lakh cap.
India's defence exports soar to Rs 21,083 crore, SIDM reports
India's defence sector has achieved record-breaking production and export figures, with Rs 1.27 lakh crore in production and Rs 21,083 crore in exports for FY 2023-24. This growth, driven by the 'Aatmanirbhar Bharat' initiative and strategic government policies, highlights the significant contributions of both public and private sectors. The Society of Indian Defence Manufacturers (SIDM) has played a crucial role in this transformation, advocating for industry interests and fostering innovation. SIDM remains committed to supporting India’s pursuit of becoming a global defence leader.
At private dinner, Modi & Putin discuss Eurasian geopolitics, Indian investments
Prime Minister Narendra Modi and Russian President Vladimir Putin engaged in a detailed dialogue on Monday addressing the Eurasian landscape and its security, trade imbalance, the upcoming BRICS summit in Kazan, joint defense manufacturing under the 'Make in India' initiative, and India's expansion in the Far-East via the Vladivostok-Chennai maritime corridor.
Forgot Modi stocks? Numbers indicate don't write them off. 26 are already back. Budget tailwinds may bring more of them back to limelight again
Just before the election results were announced, some domestic and foreign brokerages came out with a report about a set of stocks which were called Modi stocks. The number varied from 50 to 55 stocks. The reason why they were called modi stocks was the fact that these stocks were from sectors which were expected to get renewed policy push once the third term of the Modi government started. This list had stocks which would power data centers, which is essentially an AI play to green energy stock to PSU stocks from sectors which were getting strong policy push. But then political arithmetic turned different and everybody forgot about them. One month later, if one looks at them, it is clear that while the term “ Modi stocks” might be off the headline, in terms of performance, the picture is very different from what most have been thinking. It is far better and there is a high probability that it might get better.
Explosive growth: How defence sector became a darling of investors
Motilal Oswal Nifty India Defence Index Fund breaks records by collecting Rs 1,676 crores during its NFO period. India's defence sector experiences growth through indigenisation efforts and increased investments. The country aims to enhance its defence production capabilities and boost exports in the coming years.
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India's defence production skyrockets to Rs 1.27 lakh crore in 2023-24, thanks to 'Make in India' success
Defence Minister Rajnath Singh announced that India achieved its highest-ever growth in defence production value for 2023-24, highlighting significant milestones for the Make in India initiative. He reiterated the government's commitment to fostering a favorable environment to establish India as a key global defence manufacturing hub.
Want to balance risk-return now and not just focus on returns: Siddharth Vora
Other than valuations which seem to provide some sort of caution, volatility has come off very significantly post elections. All the macro data points around India are very robust. From a macro perspective, there are no major red flags. We are not seeing any major systemic risk for Indian equities as well andit is very clear that this is still a broad-based bull market, Siddharth Vora.
Defence Ministry signs 350th iDEX contract with SpacePixxel Technologies for miniature satellite development
The Ministry of Defence signed its 350th iDEX contract with SpacePixxel Technologies Pvt Ltd for developing a miniature observation and imaging satellite for the Indian Air Force. This initiative aims to innovate in space electronics by miniaturising payloads that were previously deployed on large satellites. The new satellite will integrate multiple miniaturised payloads, offering benefits like faster deployment and lower environmental impact. Defence Secretary Giridhar Aramane praised the commitment of defence innovators and assured them of continued support.
3 themes to bet on now for pre-Budget plays: Gurmeet Chadha
Gurmeet Chadha says that the market is trying to position on the pre-Budget period. But there are very few pockets which give a lot of valuation comfort. So, we have to be very selective in terms of what we buy and ensure that we do not end up paying very unreasonable valuations in those pockets.
Ajay Bagga on where to look for next market trigger and pockets to avoid now
Ajay Bagga says railways and defence sectors have already run up much and multi-year order books have been factored in. Now it is the execution challenge. So, have the investors already eaten the pie for railways and defence? Not fully, but right now there might be one more move up like we saw in railway stocks today.
Capital goods, defence, railways segment should continue to do well in PSU space: Mihir Vora
See, the good part is that the election has voted for continuity. So, there is no change in the ruling regime, so that is a big positive because what the market and the economy were expecting is continuation of the growth policies for various segments that the earlier government had been working on.
Modi 3.0 in action: NDA's 100-day dash unveiled with key ministry moves
With the National Democratic Alliance assuming power, all Union ministries are set to launch their 100-day plans. ET provides a snapshot of the key government initiatives and actions planned for the next three months.
Security & legal proposals to now come under Niti
Niti Aayog, under Major General K Narayanan, to focus on security and law proposals. Reconstitution aligns with government's emphasis on security and legal matters.
Nirmala Sitharaman: Feisty defender of Modi govt to filling big shoes
As a staunch defender of the Modi government's economic policies and executor, Nirmala Sitharaman created a record when she was appointed as the first female Raksha Mantri, or Defence Minister, in 2017. Prior to that, she was industry and commerce minister.
Stage set for Modi 3.0; which sectors are likely to see growth?
With BJP bagging 240 seats and NDA 291, a much less than expected results in the polls, investors will be looking forward to reviewing their portfolio, prompting predictions on policy recalibration by experts.
First among equals: 5 PSU stocks which have benefited the most due to government policy push, spending & may continue their journey
Right from perennial under-performers like oil marketing and refining companies to PSU banks. Literally every stock which has the tag of “PSU” stock has seen a re-rating in the last two years. Now that the exit polls are predicting what the street has been looking for, that is continuity in the policy making framework, there is a high probability that there will be another round of re-rating of PSU stocks. So, continued policy and continued re-rating. Like the earlier re-rating, this time also, some sectors and stocks in the PSU space will outperform others. A company which is going to be providing finance for the expansion of the solar energy network which is the next focus area of the government. The overall demand runway for some of the sectors is longer. This essentially means that while every PSU is likely to see a push, there are a select few which are likely to see more tailwinds of business growth and valuation expansion.
Defence stocks: Long runway, hedge a bit to avoid narrative-based decisions; 8 PSU & Pvt sector stocks, 4 with upside potential of upto 44%
In an election season, there are bound to be times when one or the other narrative may make one question about whether one should sell the stocks. The underlying reason would be fear of losing the gains on which one is sitting. Especially when it comes to sectors like defence, railways and others which have seen a strong re-rating and siting with big gains and already there has been skepticism about their stock price moving ahead of time. Now let's look at the issue in two ways, first is whether the fundamentals of the sector are on a strong foot and business is fine or not. Second, how to hedge the exposure so that one is not forced to sell due to narrative, because the fact is that a continuation in policy push means that the companies have just started their journey. While defence PSUs are well known, there are other private sector players, whose lifeline is dependent on defence expenditure and in the last few years they have also done well, both on the street and in terms of real business. So, it is better that one should hedge and stay with them and not get jittery because of one or the other narrative which will keep hitting the street till 4th June.
India well poised to benefit from great opportunities coming from hotels and hospitality sector: Puneet Chhatwal, IHCL
And if things keep going this way, and it is anybody's guess, I know that there is a new book coming out in the market which predicts India at 47, with more than 50 trillion economy and there are others that are predicting at 27 or 28.
If Modi is re-elected, these sectors will get his most attention
Prime Minister Narendra Modi has pledged to propel India to become the world's third-largest economy if re-elected for a third term. His ambitious 100-day agenda post-election includes prioritizing manufacturing, new-age technology, infrastructure development, and clean energy sectors. The government aims to implement reforms to boost economic growth and attract foreign investment.
Indian Army reduces ammunition imports, boosts indigenous production under 'Make in India' policy
The Indian Army has significantly reduced its dependency on imported ammunition thanks to the 'Make in India' policy. By leveraging private sector capabilities and public sector firms, the Army aims to cease most ammunition imports within a few years. This shift not only cuts import costs but also enhances export potential. Key industry players, including Munitions India Limited and Solar Industries Limited, play crucial roles in this transition, ensuring readiness for emergencies.
India's defence capabilities boosted under Modi government, relying on imports only for immediate needs: NITI Aayog member VK Saraswat
India has significantly enhanced its defense capabilities over the past decade, with a focus on indigenous manufacturing and reducing reliance on arms imports. VK Saraswat, a member of NITI Aayog and former chief of the DRDO, highlighted that 60% of India's arms and ammunition are now domestically produced, with major corporations like Adani, Tata, and L&T contributing to radar systems and gun manufacturing. Saraswat also assured that India's power capacity is sufficient to meet its needs, minimizing the risk of significant power cuts. Companies like Hindustan Aeronautics (HAL) and Bharat Electronics are poised to benefit from these trends.
Sri Lanka in talks with India to set up small arms manufacturing unit: Premitha Tennakoon
Sri Lanka is in discussions with India to establish a small arms manufacturing unit, as part of their defence cooperation. State Minister of Defence Premitha Bandara Tennakoon said the discussions are ongoing and a joint venture in the military industry. The Indian envoy in Colombo, Santosh Jha, stated that India would be willing to make these capabilities available to Sri Lanka.
Defence stocks: Stay bullish, just hedge a bit to avoid narrative-based decisions; 4 stocks with upside potential of up to 33%
One of the sectors which has seen strongest re-rating in the last four years has been defence. Now in the last few days, the way markets have corrected and a narrative has come on the street that it is poll jitters which is making FPI sell, without realizing the fact that after a strong phase of upward movement, the global money tends to move in one from one country to another, especially in emerging market segment, it might lead to a situation where one might end up selling the long term winner early because of the narrative. Rather than getting jittery, it would be better to create a hedge and stay with the stocks where there has been a big change in the fundamental ways things operate.
India's defence sector has opportunities for USD 138 bn over next 10 years
Nomura's 'India Defence' report projects a substantial USD 138 billion ordering opportunity in India's defence sector over FY24-32, driven by rising demand for equipment and services. Defence capital expenditure is expected to surge to 37% of the total budget by FY30, supported by government policies promoting indigenous manufacturing and technology development.
India, EU hold consultations on Ukraine conflict, South Asia and West Asia developments
Furthermore, they discussed security and defence policy developments. The EU informed on the implementation of EU’s Strategic Compass and the Indo-Pacific Strategy, including the European Defence Industrial Strategy (EDIS), as well as new EU operations, such as the EUNAVFOR Aspides, according to EU mission statement.
View: Defence exports have witnessed a considerable uptick, even as some bottlenecks need removing
Narendra Modi's dialogue on India's defence exports with Vladimir Putin in September 2022 led to a remarkable surge of ₹21,083 crore in 2023-24. This growth, driven by various initiatives and partnerships, underscores the evolving landscape of India's defence industry. 2023-24 has witnessed a big increase, from ₹15,920 crore in 2022-23 to ₹21,083 crore, representing an increase of 32.43%. Notwithstanding the pandemic serving as a dampener, at no stage before the last decade have Indian defence exports experienced such a steep upward trajectory.
Army plans transformative reforms to boost combat capabilities
The top Army brass also resolved to undertake organisational and procedural transformation in the 1.2 million force to ensure induction and absorption of niche technology towards futuristic capability development with a focus on 'Atmanirbharta' (self-reliance).
Skepticism on stock price vs tailwinds of policy push: 4 defence sector stocks with upside potential of up to 26%
In the last four years of bull run, among the PSU space, defence was the first sector to see a re-rating, infact it was the sector which led back the resurgence of the PSU space which was then followed by railways and then NBFCs which are lending to particular sectors. Now the fact that the defence stocks have run up sharply and sitting with gains, questions are bound to come on whether they have priced all the positives or not. A part of the answers lies in looking at how the stock behaved in recent times and whether the macro operating picture of the sector has changed or not. On the price front, in the corrective move of March, after initial correction due to profit booking, some of the defence stocks have once again moved upward and are quoting close to all time high, indicating demand for the paper from this sector. On the fundamental front, the operating matrix is better and probably it is one of the sectors where the continuation in policy making will have the biggest positive impact.
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