India's defence sector a US$ 138 billion opportunity; HAL, BEL top buys: Nomura

Nomura's recent report underscores an ordering opportunity worth US$ 138 billion within India's defence sector, spanning FY24 to FY32. This surge is propelled by escalating defence budgets, modernization initiatives, and governmental emphasis on indigenous manufacturing, notably through the "Make in India" campaign. As India holds a strategic position in the South Asian region, strengthening defence capabilities is imperative for national security, addressing prevailing regional challenges.

Notable market performances include Nibe Defence and Aerospace Limited (NIBE) surging 135% in calendar year 2024 (CY24). Globally, military expenditure surged to US$ 2,443 billion in CY23, marking a 6.8% year-on-year (YoY) increase, according to reports. This uptrend in spending spans all five geographical regions delineated by the Stockholm International Peace Research Institute (SIPRI), a phenomenon unseen since CY09. The rise in India's military spending is chiefly attributed to escalating personnel and operations costs, comprising nearly 78% of the total military budget, while capital outlays for procurement remain relatively stable at around 22% of the budget in CY23.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.