ICICI Securities: India’s Defence Sector PSUs Can Benefit From Likely Order Activity
Akash surface-to-air missiles are displayed by the Defence Research and Development Organisation during the DefExpo 20 in Lucknow, Uttar Pradesh, India. (Photographer T. Narayan/Bloomberg)

ICICI Securities: India’s Defence Sector PSUs Can Benefit From Likely Order Activity

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Ministry of Defence, in successive weeks, has announced drafts of new Defence Acquisition Policy 2020, Defence Production and Export Promotion Policy 2020 and now an import ‘embargo’ list on 101 weapons and military platforms progressively till CY25. We do believe public sector undertakings are best placed to get incremental order inflows.

Key takeaways from the flurry of Defence Ministry announcements:

1. Priority of order allocation to defence public sector enterprises will continue, private sector role continues to be limited at best

2. Majority of embargoed items can be categorised in a) already under production, b) to be bulk produced in the near future, c) recently imported or d) to be imported in the near future till the embargo sets in – thereby, doesn’t impact order inflow or earnings expectations

3. Current border standoff with China increased expectation of a ‘defence cess’, ‘segregation of pension bills into the central budget’ et all to increase/sustain defence budget; the expectations were fanned by a timely Defence Acquisition Council meeting clearing procurement of certain platforms i.e. Tejas, light combat helicopter, land attack cruise missile.

Click on the attachment to read the full report:

ICICI Securities Defence Sector Update.pdf


This report is authored by an external party. BloombergQuint 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 brokerage and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.