Defence stocks like Hindustan Aeronautics, Bharat Dynamics, Bharat Electronics among others will be in focus after the government granted an extension in exemption of customs duty on the imports of certain parts. The exemption, which was to end on July 1, 2024, has now been extended for a five-year period till 2029.

The exemptions apply to categories like military helicopters with empty weight more than 3,500 kg, associated role equipment, ground support equipment, ground handling equipment and other categories.

In the Union Budget of 2019, the Finance Minister Nirmala Sitharaman had proposed the defence equipment not being manufactured in India from customs duty with an objective to "securing our borders."

Defence stocks have been in focus through the year in-line with the sentiment around PSUs and with the hope of securing more orders in the medium-to-long term.

Rajnath Singh, India's Defence Minister, earlier this month is now targeting India's defence exports to ₹50,000 crore by 2028-2029. Defence exports had hit a record high of ₹21,083 crore in financial year 2024.

A note from brokerage firm Anand Rathi suggests that India's defence and aerospace industry market is likely to grow to $11.8 billion by 2029. Private sector's share in the defence production has now hit an eight-year high of 22%, according to the brokerage.

For the Indian Army, Anand Rathi listed Bharat Dynamics, BEML and MIDHANI as the key players, while shipbuilders like Mazagon Dock, Garden Reach and Cochin Shipyard were listed as the key players for the country's Navy.

(With Agency Inputs)