Domestic brokerage firm Elara Capital is positive about the defence sector after the Ministry of Defence (MoD) approved the third Positive Indigenisation List (PIL) of 780 strategically important items, comprising line replacement units (LRUs)/sub-systems/components, on August 28, 2022.
This step will further curtail defence imports by Defence Public Sector Undertakings (DPSUs) and harness the design capabilities of the domestic defence industry. MoD believes the move will position India as a design leader in these technologies.
Elara Capital expects small and medium domestic private companies to be major beneficiaries of this move.
Elara pointed out that this is the third list of LRUs/Sub-systems/Assemblies/Sub-assemblies/Components to be approved post the two PILs published in December 2021 and March 2022. Of the 458 (351+107) items in the prior two PILs, 167 components (first PIL – 163 nos, second PIL – 4 nos) have been indigenized.
"The third PIL (sixth PIL for defence goods) further attests to the MoD’s continued pursuit of self-reliance in defence manufacturing, as also to minimizing imports and developing small and medium private defence companies," Elara said.
"We remain positive on the indigenization story and are encouraged by rising exports pie. We believe small and medium private defence companies such as Data Patterns, MTAR Technologies, Paras Defence, Astra Microwave, Dynamatic Technologies, Taneja Aerospace, etc., would likely emerge as key beneficiaries," the brokerage firm added.
Disclaimer: The views and recommendations given in this article are those of the broking firm. These do not represent the views of MintGenie.