Rs 52K-crore DAC Nod for Anti-drone Systems, Missiles to Benefit BEL, BDL, Zen Tech, Paras Defence and UAV Startups

Mumbai, July 4: Capital proposals worth approximately Rs 52,000 crore approved by the Defence Acquisition Council (DAC) on Friday is one of the largest batch of approvals cleared in a single day this year. More importantly, the contents of the list – anti-drone systems, missiles, air defence platforms, unmanned systems and naval mines and surveillance systems – points to decent near-term revenue visibility for India’s three listed defence companies as well as a clutch of unlisted unmanned aerial vehicle (UAV) startups. Spread across orders for the Army, Navy and Air Force, the approval also indicates that the sector’s order-book growth momentum, which has picked up over the last two years, will remain intact through the first half of FY26 at least.

BEL, BDL to benefit from Akash, MRSAM and MPATGM orders

Bharat Electronics (BEL) and Bharat Dynamics (BDL) are likely to be the biggest order winners from Friday’s DAC approval. BEL, India’s premier defence electronics PSU that co-develops and supplies the radar and command systems of the Akash missile system, and is also the systems integrator (lead for BEL, sub-led by Israeli defence company IAI) for the Medium Range Surface-to- Air Missile (MRSAM) programme stands to benefit from orders directly flowing from the approvals related to AKASH TARANG anti-UAV system as well as the clearance and fund approval for MRSAM beyond the initial fleet buy of five launchers. The private-sector BDL is India’s leading missile integration company. It is the natural choice for production agency for MPATGM (MAN Portable Anti-Tank Guided Missile), for which BEL and BDL have been jointly selected as the Development- cum- Production Partner by the Army. BDL has also been integrator of Akash-derivatives like Helina and Vyavatra.

Anti-drone plays like Zen Technologies, Paras Defence and UAV start-ups to gain

Anti-drone systems developer Zen Technologies, Paras Defence and Space Technologies and UAV startups stand to benefit from approvals related to anti-drone systems and kamikaze drones. Zen Technologies, which offers a multi-layer counter-drone solution consisting of radar, jamming systems and both hard kill and soft net-based systems for threat interception, and Paras Defence, whose wholly-owned subsidiary Paras Anti-Drone Technologies has already secured multiple MOD contracts for RF jammers and handheld portable systems to counter drones stands to benefit from approvals specifically mentioning AKASH TARANG as well from the larger push towards countering UAV threats. While companies like Solar Industries’ defence wing, which supplied the Nagastra-1 loitering munition system to the Army earlier this year in a deal worth about Rs 212 crore, are likely contenders to supply loitering munitions/kamikaze drones, startups such as Raphe mPhibr and NewSpace Research and Technologies (NRT) – both of which have won recent deals with the Army to supply surveillance drones and drone swarm systems – and Big Bang Boom Solutions, a well-funded loitering munition startup, could also see business. Listed drone maker ideaForge Technology Technologies, which was one of the companies to supply drones to the Army after Operation Sindoor was conducted by India last year, could also see some opportunity from follow-on demand as the Army and Air Force look to ramp up their UAV holdings.

L&T and Bharat Forge to benefit from tank protection orders

On the armour segment front, active protection system (APS) for tanks will bring Larsen & Toubro (L&T), which has entered into an agreement with Israeli defence major Rafael to co-produce Trophy Active Protection System in India, and Bharat Forge’s Kalyani Strategic Systems division, which has been developing its own APS-equipped light tank and other armour platforms for the Army, into the picture.

Naval mines, shipborne UAVs to provide opportunity to Shipyards

The Navy will receive hardware worth over Rs 14,000 crore as part of DAC’s approval on Friday. Naval orders for Multi Influence Ground Mines and Naval Shipborne Unmanned Aerial Systems (NSUAS), along with approval for a new electric propulsion testing facility brings opportunities for shipyards such as MDL, Garden Reach Shipbuilders and Engineers (GRSE) and Cochin Shipyard – all of whom are currently constructing warships that will be fitted with BEL- and DRDO-developed sensors, sonars and mine-countermeasure equipment – while equipment suppliers to several of these ships such as radar-maker Data Patterns, missile sub-system maker Astra Microwave Products and MTAR Technologies could see orders flow in as well.

Order-book visibility improves for defence cos, though contracts are few quarters away

The approvals cleared by the DAC on Friday also reinforces the government’s continued push for indigenisation under the Atmanirbhar Bharat defence initiative with nearly all categories in Friday’s list having been given a “Buy (Indian)” or “Buy and Make (Indian)” preference. While order-visibility improves for BEL, BDL, HAL and the larger private defence-adjacent companies such as L&T and Bharat Forge Systems over the next few quarters, actual signing of contracts and recognition of revenues typically occurs a few quarters after the Army/RNavy/Miscellaneous CEO (AoN) approval is granted. However, it should be noted that these proposals will now go into the request-for-proposal (RFP) stage, followed by competitive bidding before contract awards are finalised.

Source: Ministry of Defence