Defence stocks gained after the DAC cleared ₹52,000 crore defence acquisition proposals.
Indigenous procurement approvals strengthened sentiment for HAL, BEL, Mazagon Dock and Paras Defence.
BHEL remained in focus as JM Financial flagged potential gains from a key naval project.
Defence stocks traded higher on Monday after the Defence Acquisition Council (DAC) accorded Acceptance of Necessity (AoN) for capital acquisition proposals worth around ₹52,000 crore, boosting investor sentiment towards companies linked to defence manufacturing and indigenous procurement.
At around 11 am, Paras Defence and Space Technologies surged 5.02% to ₹1,359. Bharat Electronics (BEL) gained 1.59% to ₹424.70, Mazagon Dock Shipbuilders rose 1.08% to ₹2,571, while Hindustan Aeronautics (HAL) advanced 0.82% to ₹4,465.10. The Nifty India Defence index was up 1.35% at 9,703.75.
1 June 2026
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The rally came after the DAC, the country's highest decision-making body on defence procurement, approved a series of capital acquisition proposals aimed at strengthening the operational capabilities of the armed forces.
The approvals include indigenous procurement of the Akash Tarang anti-drone electronic warfare system, man-portable anti-tank guided missiles (MPATGM), medium-range surface-to-air missile (MRSAM) systems, very short-range air defence systems (V-SHORADS), active protection systems (APS) for tanks and jet-powered loitering munitions.
For the Indian Navy, the council also approved proposals for multi-influence ground mines, naval shipborne unmanned aerial systems (UAS) and the establishment of a Land Based Testing Facility (LBTF).
An Acceptance of Necessity is the government's in-principle approval for a defence procurement proposal and represents the first stage of the acquisition process. Actual contracts are awarded only after tendering, technical evaluation and commercial negotiations.
BHEL Gains From Brokerage Upgrade
Adding to the positive sentiment, JM Financial Institutional Securities reiterated its 'Buy' rating on Bharat Heavy Electricals (BHEL) with an unchanged target price of ₹435.
The brokerage said the government's decision to allow four Chinese electrical equipment manufacturers to participate in PSU tenders for high-voltage transformers and gas-insulated switchgear would have a limited impact on BHEL.
JM Financial also said the DAC's approval for a Land Based Testing Facility for electric propulsion systems used in Indian naval assets could make BHEL a key beneficiary, given its experience in the segment.
The brokerage expects BHEL to report June-quarter revenue of ₹66 billion, up 20% year-on-year, with an EBITDA margin of at least 1.9% and a return to profitability after recording first-quarter losses in each of the previous eight years.
It also projects BHEL's revenue, EBITDA and profit after tax to grow at compound annual growth rates of 21%, 57% and 71%, respectively, between FY26 and FY28.
