Defense stocks rally on bagging contracts from MoD; BEL, BDL surge up to 8%- QHN
The MoD on March 30, 2023 signed contracts with Indian shipyards, Bharat Dynamics, Bharat Electronics, and BrahMos Aerospace Private for the procurement of various defence equipment worth over Rs 35,000 crore.
MoD has signed 12 different contracts worth Rs 8,194 crore with BEL. These include two contracts for Indian Air Force (IAF) – 90 Electronic Warfare (EW) Suite Equipment for Medium Lift Helicopter and Annual Maintenance Contract (AMC) for Akash Missile System.
With these contracts, BEL’s total orders inflow is estimated at around Rs 20,200 crore in FY23 till date, largely in line with the management’s full year guidance. As mentioned in some of the contract details, the execution period is expected to be two to four years. The current order backlog is estimated to be at around Rs 62,200 crore (3.5x TTM revenues) providing strong revenue visibility, ICICI Securities said in a note.
GRSE in exchange filing said that it has signed a contract with the MoD for construction of 04 Next Generation offshore Patrol Vessels today. The Total Project Cost of 04 GRSE Vessels is around Rs 3,500 crore.
Meanwhile, BDL signed a contract for Rs 8,161 crore with the MoD for production and supply of Akash Weapon System to the Indian Army. Further BDL also received an order of Rs 261 crore for CMDS for MLH Helicopters.
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