Reports: India’s Defence Sector to Invest $138 Bln Over Next Eight Years
A recent report from foreign brokerage Nomura has shed light on India’s defense sector, forecasting contracts worth approximately $138 billion from fiscal years 2024 to 2032. This projection indicates a notable surge in defense capital expenditure, expected to escalate to 37 percent of the total budget by FY30, a substantial increase from the projected 29 percent in FY25.
The report underscores promising prospects within the aerospace and shipbuilding domains. Aerospace investments are estimated at $50 billion, spanning aircraft, helicopters, drones, avionics, and related systems. Meanwhile, defense shipbuilding is poised for $38 billion in investments, focusing on naval vessels, submarines, patrol boats, and support ships to bolster maritime security. This collective investment totals INR 15.5 trillion over FY24-30.
Further, the report anticipates growth in India’s defense exports, projected to reach $29 billion. Additionally, investments in missiles, artillery, and gun systems are expected to amount to $21 billion.
Hindustan Aeronautics Limited (HAL), a leading producer, is positioned favorably in fighter aircraft and helicopters, with its shares potentially seeing a 28% uptick. HAL’s significant capability upgrade lays the groundwork for an indigenous engine program.
Conversely, Bharat Electronics exhibits promising potential with a projected 32% uptick, attributed to improved visibility in order inflows, the expectation of delivering favorable margins, and an expansion in returns ratios.
