Nuclear, Defence Stocks in Focus as India-Australia Ink 18 Pacts on Uranium Supply

Mumbai, July 10: India and Australia on Thursday agreed to supply uranium for India’s civil nuclear energy programme as the countries signed 18 agreements covering atomic power, defence, critical minerals and maritime security during Prime Minister Narendra Modi’s Melbourne visit. Noting the agreements have set the stage for India’s clean energy push, Modi said in a joint press conference with Australian PM Anthony Albanese that his country welcomed Australia’s support in its effort to scale up nuclear power capacity. 

In addition to a civil nuclear cooperation pact for uranium sales, the two countries signed defence and security cooperation agreements covering maritime defence and security as well as military equipment interoperability; a pact on cooperation in coastal and ocean affairs; and an overarching Australia-India Cyber and Critical Technology Partnership, designed to improve cooperation on industrial base resilience. 

Sectors That Stand to Benefit  

Here are some sectors and stocks that could benefit from the India-Australia ties: 

Nuclear Power & Energy Utilities  

Australia’s civil nuclear agreement with India clears the way for supply of uranium for atomic power projects. Commercial supply of uranium from Australia, among the top holders of uranium reserves, will diversify India’s supplier base beyond Russia, Kazakhstan and France. Nuclear power capacity in India is expected to increase several-fold by 2047, per government estimates. NPCIL is not traded on exchanges but its equipment suppliers will benefit from fuel security. 

Critical Minerals & Mining  

The Australia-India Cyber and Critical Technology Partnership also lays the ground for creation of a “critical minerals corridor” between the two countries. India imports many battery-advanced minerals like lithium and cobalt, primarily from China and countries that supply minerals from China. Companies working on battery-grade minerals processing and clean-energy supply chain components like EV battery packs, solar module manufacturing equipment could benefit from supply chain diversification that lessens dependence on China. 

Defence & Shipbuilding  

Domestic defence companies like Bharat Electronics, L&T and Hindustan Aeronautics Ltd stand to benefit from India’s defence and security agreements with Australia. Opportunities include joint development of military equipment (opening up scope for transfer-of-technology) as well as participation in contracts to supply parts/accessories for Australian defence platforms. 

Oil & Gas/Coal Importers  

India and Australia agreed to ensure stable supplies of coal, diesel and liquid fuels like gasoline and natural gas, as well as facilitate private sector investment in critical energy infrastructure. Oil and gas importers and refiners like Indian Oil Corp will benefit from dependable fuel supply. Mining PSU Coal India also benefits.  

Renewable Energy & Clean Tech  

Climate change and green energy were highlighted by Modi in his speech after the leaders signed the agreements. India and Australia could cooperate on renewable energy tech-transfer, supply chain minerals for solar power generation, batteries storage, etc. Renewable power developers like RenewSys (RESHANSOL) and clean-tech companies stand to benefit. 

Ports, Logistics & Maritime Services  

Australia has signed an agreement on cooperation with India’s Coast Guard that can translate into better maritime domain awareness and security cooperation for Indian ports and shipping companies operating in key Indo-Pacific sea lanes. Port operators like PPP-run Jawaharlal Nehru Port Trust could benefit from increased trade efficiencies. 

List of Stocks  

Here is a list of stocks that may benefit from the India-Australia agreements: 

• Nuclear Power Corporation of India (NPCIL): NPCIL is not listed but its suppliers will benefit from better uranium fuel security 

• NTPC (NTPC): India’s largest power generator plans to build nuclear power plants; the company gains from fuel security. 

• Larsen & Toubro (LT): Involved in nuclear plant construction and working with Indian defence ministry on several platforms. 

• Bharat Electronics (BEL): Defence electronics manufacturer stands to benefit from tie-ups with Australian defence industry. 

• Hindustan Aeronautics (HAL): Aerospace and defence company is likely to benefit from defence industrial cooperation. 

• Mazagon Dock Shipbuilders (MAZDOCK) and Cochin Shipyard (COCHINSHIP): Indian shipyards involved in manufacture of defence platforms will benefit from Indo-Australian cooperation in shipbuilding. 

• Coal India (COALINDIA) and GAIL (India) (GAIL): Energy suppliers tied to pact ensuring reliable coal and natural gas supplies. 

• Amara Raja Energy & Mobility (ARE& M) and Exide Industries (EXIDEIND): Battery manufacturers that can benefit from cheaper access to critical minerals for EV batteries and storage units. 

• Adani Ports and Special Economic Zone (ADANIPORTS): May benefit from better maritime security and port operator co-operation. 

Source

•  https://www.pib.gov.in/PressReleasePage.aspx?PRID=2282685&reg=48&lang=1