Will the Rs 79,000-Crore DAC Boost Help HAL, BEL, and Other Defence Stocks Thrive in 2026?
Will the Rs 79,000-Crore DAC Boost Help HAL, BEL, and Other Defence Stocks Thrive in 2026?
India’s defence manufacturing story is entering a powerful new phase as the Defence Acquisition Council (DAC) clears procurement proposals worth Rs 79,000 crore. This massive approval has reignited investor interest in defence stocks such as Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL), Bharat Dynamics Limited (BDL), and other key players across the defence ecosystem.
The announcement has not only strengthened market confidence but also reinforced the government’s commitment to Atmanirbhar Bharat and indigenous defence production. With India steadily cutting import dependency and boosting domestic manufacturing, investors are now asking a critical question:
Can this DAC approval drive long-term growth and stock performance through 2026 and beyond?
This article explores the full impact of the Rs 79,000 crore DAC clearance, the sectors and companies that stand to gain, projected growth numbers, and what this means for investors.
What is the DAC, and why does it matter for defence stocks
The Defence Acquisition Council, chaired by the Defence Minister, is the highest decision-making body for defence procurement in India. Its approvals signal upcoming orders, long-term revenue visibility, and strategic clarity for defence manufacturers.
The recent DAC clearance of nearly Rs 79,000 crore includes procurement for the Indian Army, Navy, and Air Force. A major highlight is that a significant portion of this value is reserved for Buy Indian and Buy Indian IDDM categories, meaning the equipment will be designed and manufactured within India.
This is crucial for companies like HAL, BEL, BDL, and private defence players, as it ensures steady order inflows for several years.
Why this Rs 79,000 crore DAC approval is a big deal for investors
This DAC decision is not just another government announcement. It has long-term economic and strategic implications.
First, it provides revenue visibility for defence companies for the next three to five years. Second, it supports capacity expansion, job creation, and technology development. Third, it improves India’s defence export potential.
According to Economic Times, the DAC approval includes projects related to fighter aircraft, helicopters, warships, missile systems, electronic warfare equipment, and advanced surveillance platforms. This broad coverage means multiple segments of the defence ecosystem will benefit simultaneously.
Key defence segments expected to gain from DAC approval
- Fighter aircraft and helicopter manufacturing led by HAL
- Missile systems and ammunition production are benefiting BDL
- Radar, communication, and electronic warfare systems led by BEL
- Naval platforms and indigenous warship components
- Advanced sensors, drones, and command systems
How HAL stands to benefit from the DAC decision
Hindustan Aeronautics Limited remains one of the biggest beneficiaries of the new DAC approvals. HAL already has a strong order book exceeding Rs 90,000 crore, and the new proposals could push it significantly higher.
The approvals are expected to include platforms such as the Light Combat Aircraft Tejas Mk 1A, advanced helicopters, and engine-related programs. These orders provide long-term visibility and margin stability.
Analysts from leading brokerages believe HAL’s revenue could grow at a compound annual growth rate of 15 to 18 percent over the next three years. Profitability is also expected to improve as localization reduces import costs.
BEL and the electronics opportunity under DAC
Bharat Electronics Limited is another major beneficiary of the Rs 79,000 crore defence push. BEL specializes in radars, communication systems, electronic warfare, and surveillance technologies.
With modern warfare becoming more technology-driven, BEL’s product portfolio aligns perfectly with future defence needs. According to analysts, BEL’s order book could cross Rs 90,000 crore if the upcoming DAC projects convert into contracts.
The company also enjoys strong margins and consistent cash flows, making it a favorite among long-term investors.
How BDL and missile makers gain from the defence push
Bharat Dynamics Limited plays a critical role in missile manufacturing. The DAC approvals include missiles and precision guided munitions, which directly benefit BDL.
With India focusing on reducing missile imports and increasing exports, BDL is expected to see stable revenue growth through 2026. Analysts expect mid-teens earnings growth supported by strong order execution.
What market experts and analysts are saying
Market experts believe the defence sector is entering a multi-year growth cycle.
According to ET Now, defence stocks rallied after the DAC announcement as investors priced in strong execution visibility.
Defence Decode highlighted that the approvals reinforce India’s long-term military modernization goals and strengthen domestic suppliers.
Vismaya shared insights on how indigenous manufacturing is becoming the backbone of India’s defence strategy.
OSINT analysts also noted that the scale of approvals reflects strategic preparedness and export ambitions.
Review Vayu emphasized the positive ripple effect across aerospace and defence supply chains.
How defence stocks have performed and what lies ahead
Over the past three years, Indian defence stocks have significantly outperformed broader indices. Companies like HAL, BEL, and BDL have delivered strong returns driven by rising order books and policy support.
With the latest DAC approval, analysts expect this momentum to continue into 2026. The focus is now on execution, timely delivery, and export growth.
Expected financial impact and revenue outlook
Based on brokerage estimates and public data, the Rs 79,000 crore DAC approvals could translate into:
- Annual revenue growth of 15 to 20 percent for key defence PSUs
- Improved operating margins due to localization
- Higher return on equity over the next three years
These factors make defence stocks attractive for both growth and stability-focused investors.
How government policy strengthens long-term outlook
India’s defence policy is aligned with long-term self-reliance. Initiatives like Make in India, positive indigenisation lists, and higher capital expenditure ensure steady demand.
The government has also streamlined procurement processes, reducing delays and improving execution timelines.
This policy stability is one of the strongest reasons investors remain confident about defence stocks.
Key risks investors should still watch
Even with strong fundamentals, risks remain. Delays in execution, cost overruns, or changes in government priorities can impact timelines. Global geopolitical shifts may also affect export opportunities.
However, these risks are currently outweighed by structural tailwinds.
What investors should track going forward?
- Conversion of DAC approvals into firm contracts
- Order book growth of HAL, BEL, and BDL
- Margin trends and execution timelines
- Export order wins and global partnerships
- Policy announcements and budget allocations
Final outlook on DAC and defence stocks in 2026
The Rs 79,000 crore DAC approval marks a defining moment for India’s defence manufacturing ecosystem. It strengthens confidence in domestic capability, supports long-term earnings growth, and positions defence companies as core contributors to India’s economic and strategic goals.
For investors, the story is not just about short-term stock movements but about participating in a long-term national transformation. With strong policy backing, rising demand, and improving execution, defence stocks like HAL, BEL, and BDL appear well-positioned to thrive through 2026 and beyond.
As India accelerates toward self-reliance in defence, the DAC approval could be remembered as a turning point that reshaped the sector for years to come.
FAQ’S
The Rs 79,000 crore DAC approval is a major clearance given by India’s Defence Acquisition Council for purchasing defence equipment made in India. It is important because it boosts domestic manufacturing, supports Indian defence companies, and ensures long-term orders for firms like HAL, BEL, and BDL.
The DAC approval creates a strong pipeline of future orders. HAL benefits from aircraft and helicopter programs, BEL gains from radar and electronic systems, and BDL benefits from missile production. This improves revenue visibility and long-term earnings growth for these companies.
Yes, most analysts expect defence stocks to perform well through 2026. The large order pipeline, government support, and rising defence exports could drive steady revenue and profit growth over the next few years.
Many experts believe defence stocks remain attractive for long-term investors due to strong order books, policy support, and rising domestic manufacturing. However, investors should track execution progress and valuation levels before investing.
Key risks include delays in project execution, cost overruns, policy changes, or global geopolitical shifts. While the sector outlook is strong, disciplined monitoring is important for long-term investment success.
Disclaimer
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
