Shares of ammunition and missile maker Bharat Dynamics have more than doubled in 2022, in line with India’s special focus and thrust towards ramping up domestic defence manufacturing under the “Make in India” banner.
India’s defence and aerospace manufacturing market is worth Rs 85,000 crore, with a private investment of Rs 18,000 crores. The value of defence exports in 2020-21 was Rs 5,711 crore, and the Centre aims to increase investment to Rs 1 lakh crore in 2022 and Rs 5 lakh crore by 2047.
In line with that government’s push, the stock of Bharat Dynamics has jumped by 51.8 per cent to Rs Rs 810.15 per share this year. The company’s shares closed at Rs 390.8 on December 31 last year.
Notably, the defence manufacturer accumulated returns of 108 per cent for its investors in 2022, with company’s market capitalisation jumping to Rs 14,848 crore, on the BSE.
That despite domestic equity indices plunging sharply over the last month due to inflationary concerns and its subsequent monetary policy actions by the Reserve Bank of India.
Indeed, India’s benchmark equity indices extended their fall to their lowest in over a year and marked the sixth straight session on Friday, marking their worst week in over two years, tracking World stocks headed for their weakest performance this week since the markets’ pandemic meltdown in March 2020.
But shares of Bharat Dynamics, Headquartered in Hyderabad and incorporated in 1970 as a Public Sector Undertaking under the Ministry of Defence to be the manufacturing base for guided missile systems and allied equipment for the armed forces, have managed to sail through despite those risks.
Earlier this month, the Defence Acquisition Council (DAC), headed by Rajnath Singh, cleared capital acquisition proposals worth Rs 76,390 crore for the armed forces.
It is believed that this new acquisition will substantially boost the Indian defence manufacturing industry, including Bharat Dynamics, and reduce foreign spending significantly.
Separately, the company recently signed a contract worth Rs 2,971 crore with the Ministry of Defence to supply ASTRA MK-I Beyond Visual Range (BVR) Air to Air Missile and associates types of equipment to the Indian Air Force and Indian Navy.
That, too, has likely given a buoyancy to the company’s share prices.