In the aftermath of Operation Sindoor, the Ministry of Defence (MoD) has set the stage for a record-breaking year in defence acquisitions. Following India’s military strike on terrorist infrastructure in Pakistan-controlled territory, the government has given a green light to emergency procurement (EP) contracts worth Rs 400 billion aimed at enhancing operational readiness across key military domains. Recently, the MoD has also approved 13 contracts under EP of Rs 20 billion for various platforms. Further, Defence Acquisition Council (DAC) has approved Acceptance of Necessity (AoN) for 10 proposals worth Rs 1,050 billion.
Key developments for June 2025
The month of June alone has seen a flurry of high-value contracts and project clearances, signaling a new phase of rapid and strategic capability enhancement.
i) DAC has accorded AoN for 10 proposals worth Rs 1,050 billion,
ii) MoD has approved 13 contracts for emergency procurement of Rs 19.8 billion,
iii) GRSE was declared L-1 in next-gen corvette project,
iv) Solar has received Nagastra-1 order worth Rs 1.6 billion,
v) BEL has received orders worth Rs 45.5 billion,
vi) HAL has secured ToT for ISRO’s SSLV for Rs 5.1 billion,
vii) Indian Army has released RFI for procurement of 155mm precision guided munitions for howitzers, and
viii) PTC Industries has signed an MoU with Safran to explore the manufacturing of components and materials for military aircraft engines.
Top Performers in the defence space
According to data collated by ICICI Securities, private players and DPSUs alike are seeing a surge in order inflows, with several companies guiding for double-digit revenue growth in FY26:
Private Sector:
– Solar Industries has secured a Rs 1.6 billion Nagastra-1 order and is targeting 25-30 per cent growth.
– Astra Microwave expects orders of Rs 13-14 billion, including QRSAM-related radar component supply.
– Azad Engineering a top pick, with similar high-growth guidance.
DPSUs:
– BEL has received Rs 45.5 billion in orders and expects Rs 200–250 billion more, excluding QRSAM.
– HAL is targeting order inflows exceeding Rs 1 trillion, including the Tejas Mk-2 and Su-30 upgrades.
– BDL eyes orders worth over Rs 50 billion.
– Midhani, GRSE, and Zen Technologies are poised for robust order books in FY26.
Nomura’s take on QRSAM deal
According to Nomura’s earlier interaction with industry experts on DAC’s approval for AoN for Quick Reaction Surface to Air Missiles (QRSAM), given the urgent requirement of this system especially post aftermath of Operation Sindoor, the MoD may conclude cost negotiations and approval from Cabinet Committee on Security (CCS) within 6-8 months.
This, it added, has increased the probability of Bharat Electronics receiving this contract on nomination basis by end-CY25, in comparison to management guidance of the order receipt by June 2026. “We have built QRSAM order in Bharat Electronics’ FY27 order inflow,” Nomura said.
Nomura on DAC reviving MCMV program
In February 2015, the Defence Acquisition Council (DAC) had nominated Goa Shipyard Limited (GSL) to build 12 Mine Countermeasure Vessels (MCMVs) for Rs 326 billion. However, the project was scrapped in 2017 due to disagreements over cost, technology transfer, and construction plans.
However, the need for MCMVs has become urgent due to increased Chinese submarine activity in the Indian Ocean Region, where both their nuclear and conventional submarines are capable of covertly deploying underwater mines. Currently, the Indian Navy lacks any dedicated MCMVs.
Given the situation, the DAC has once again cleared the proposal to build 12 MCMVs, now estimated to cost Rs 440 billion after accounting for inflation. “This will be followed by issuing the request for proposal (RFP), which is the formal tender, to the Indian shipyards for their techno-commercial bids for the acquisition. The rolling out of the first vessel is expected after 7-8 years of signing the contract,” the brokerage firm said.
Looking ahead: A robust FY26 pipeline
Going ahead, ICICI Securities said, most of the companies under its coverage have guided for >15 per cent revenue growth in FY26. It further added that some companies like BDL, Solar Industries and Azad Engineering have guided for an even higher growth rate of around 25-30 per cent.
These defence acquisitions signal a significant shift towards agility and responsiveness in defence procurement, post-Operation Sindoor. This aligns with India’s broader push for indigenisation and rapid force modernisation.