Defence Stocks Fired Up As India's Indigenous Production Soar To Record Rs 1.27 Lakh Crore

Defence exports also touched a record-high of Rs 21,083 crore in FY24, reflecting a growth of 32.5% over the last fiscal.

(Source: Vijay Sartape/NDTV Profit)

The rally in defence stocks continued on Friday, led by Data Patterns (India) Ltd. and Cochin Shipyard Ltd., as Defence Minister Rajanath Singh announced that India registered the highest-ever growth in defence production of nearly Rs 1.27 lakh crore in the financial year-ended March 2024.

Shares of Data Patterns (India) Ltd. jumped nearly 7%, while those of Cochin Shipyard rose over 5%. Stocks of MTAR Technologies Ltd. and Mishra Dhatu Nigam Ltd. rose over 4%.

Marking significant milestones under the 'Make in India' initiative, Singh announced on Friday that the growth includes a substantial increase from the Rs 1,08,684 crore recorded in the financial year-ended March 2023.

Singh emphasised the government's dedication for developing India into a leading global defence manufacturing hub, in a post on X, formerly Twitter.

The Ministry of Defence reported unprecedented growth in indigenous defence production during the previous fiscal, driven by the successful implementation of policies and initiatives aimed at achieving ‘Aatmanirbharta’ under Prime Minister Narendra Modi’s leadership.

Data from Defence Public Sector Undertakings, other PSUs manufacturing defence related products, and private companies indicated that the value of defence production in the country rose to a record Rs 1,26,887 crore, reflecting a 16.7% increase over the previous financial year.

Of the total value of production in fiscal 2024, about 79.2% has been contributed by DPSUs/other PSUs and 20.8% by the private sector. The data shows that in terms of absolute value, both DPSUs/PSUs and private sector have recorded a steady growth in defence production.

Moreover, defence exports have contributed tremendously to the overall growth in the indigenous production. Defence exports touched a record-high of Rs 21,083 crore in 2023-24, reflecting a growth of 32.5% over the last fiscal, when it stood at Rs 15,920 crore.

In the last five years, the value of defence production has been increasing steadily, and grown by over 60%. 

Domestic manufacturers are expected to benefit as India ramps up domestic production and capabilities and reduce reliance on costly foreign imports.

Sustained market interest has led to fund managers creating products like the HDFC Defence Fund, introduced last year and the recently launched Motilal Oswal Nifty India Defence Index Fund.

Also Read: Defence Sector Growth Outlook Makes A Case For Costlier Stocks

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