Defence stocks rose on Friday after the Ministry of Defence signed contracts worth ₹35,000 crore.
On Thursday, the Ministry of Defence signed contracts with Indian shipyards Bharat Dynamics, Bharat Electronics, and BrahMos Aerospace for equipment.
Shares of Bharat Electronics Ltd surged nearly 7% as the ministry signed two contracts worth ₹2,696 crore with the company.
At 11:21 IST, Bharat Electronics was the top gainer on the Sensex.
The first deal, worth ₹1,705 crore, is for the Indian Navy's LYNX U2 Fire Control Systems, which is a Naval Gun Fire Control System designed to acquire, track and engage targets amidst sea clutter.
The second contract, worth ₹991 crore, is for the Indian Army's Weapon Locating Radar, which has been primarily designed to locate hostile guns, mortars and rockets.
"These flagship projects showcasing the indigenous design and manufacturing capabilities of Indian Defence industry led by the company, involving other Public Sectors, Private Sectors and MSMEs. These projects will add another milestone to the ‘Atmanirbhar Bharat Abhiyaan’ and ‘Make in India’ initiative of the Government of India," said the company in an exchange filing.
According to ICICI Securities, with these contracts, the company's overall order book for FY23 is projected to be close to ₹20,200 crore, broadly in line with the management's full-year outlook.
The stock has gained 41.25% from its 52-week low of ₹68.9 recorded on March 31, 2022. The stock's weekly average delivery volume is 48.73%, and in today's session, it is trading at high volume of 32.3 million with the price gain of 6.17%.
The stock price rose 41.3% and underperformed its sector by 0.5% in the past year.
Shares of Bharat Dynamics Ltd gained over 5% after it signed a contract for ₹8,161 crore with the ministry for production and supply of Akash Weapon System to the Indian Army.
Further, it also received an order of ₹261 crore for CMDS for MLH Helicopters.
The stock was trading near its 52-week high levels recorded on October 27, 2022.
According to analysts, following the order win news from the government, the defence stocks are in strong traction today. In coming days, the stock may rally further toward ₹103, and the support level is at ₹93.