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India's defence industry is increasingly looking to expand its presence in international markets through exports of defence equipment, technology transfer, and collaboration.
India's defence sector is witnessing significant growth driven by increasing defence budgets, modernization efforts, and the government's emphasis on indigenous manufacturing through initiatives like 'Make in India', according to Nomura.
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"India’s government is actively supporting the defence sector through favourable policy reforms, incentives, and initiatives to promote indigenous manufacturing and technology development," the brokerage said.
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Nomura foresees a $138 billion opportunity in the defence sector over FY24 to FY32.
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Nomura has initiated coverage with a 'Buy' rating on Hindustan Aeronautics Ltd. for its strong moat in fighter aircraft and helicopters, and significant capability upgrade that provides a basis for the development of indigenous engine program.
Target Price: Rs 4,750, Upside: 28%
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Nomura also initiated coverage on Bharat Electronics Ltd. for its increased visibility on order inflows, conviction on margins delivery and expansion in returns ratios.
Target Price: Rs 300, Upside: 32%
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