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Recently Defense council has approved the acquisition of Rs790bn covering upgrades, overhauls and fresh procurement across key defense platforms. Over the past few months, the DAC has accorded AoN aggregating ~Rs3.3trn across the Army, Navy and Air Force, spanning missiles and air defense, electronic warfare and sensors, unmanned and autonomous systems, naval platforms, mobility solutions, and lifecycle upgrades/MRO. The steady cadence of approvals underscores a structural defense capex upcycle and the government’s continued push toward indigenization under Atmanirbhar Bharat. We believe these AoNs provide strong multi-year order visibility, support higher localization and private-sector participation, and improve execution and earnings visibility for domestic defense manufacturers, particularly across missiles, electronics, unmanned systems, naval shipbuilding and sustainment services.

On 29thDec’25 the DAC accorded AoN for procurement proposals across defense platforms aggregating ~Rs790bn, reinforcing the medium-term defence capex pipeline. We believe the major AoN approvals include Long Range Guided Rocket Ammunition for Pinaka (Solar Industries India as the primary beneficiary), and Astra Mk-II missile, which should mainly benefit Bharat Dynamics (BDL) and Bharat Electronics (BEL) while other approvals across drones, radars, naval and IAF platforms provide incremental opportunities for a wider set of domestic defense players.

Indian Army

* AoN cleared for Loiter Munition Systems for artillery regiments, enabling precision strikes against tactical targets.

* Low Level Light Weight Radars approved to detect and track small, low-flying UAVs, strengthening counter-UAS capability.

* Long Range Guided Rocket Ammunition for Pinaka MRLS to enhance range and accuracy against high-value targets.

* Integrated Drone Detection & Interdiction System (IDDIS) Mk-II approved to protect vital assets in tactical battle areas and hinterland.

Indian Navy

* AoN for Bollard Pull (BP) Tugs to aid berthing, unberthing and maneuvering of ships and submarines in confined waters.

* HF Software Defined Radio (SDR) Manpack approved to enhance secure long-range communications during boarding/landing operations.

* Approval to lease HALE RPAS, enabling persistent ISR and improved Maritime Domain Awareness across the Indian Ocean Region.

Indian Air Force

* AoN for Automatic Take-off & Landing Recording System to improve aerospace safety via all-weather, high-definition recording.

* Astra Mk-II air-to-air missiles approved, providing enhanced standoff engagement capability.

* Full Mission Simulator for LCA Tejas to augment pilot training in a costeffective and safe manner.

* SPICE-1000 long-range guidance kits approved to strengthen precision strike capability

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