Business: After a long lull, defence stocks are once again witnessing a strong rally in the trading session of Tuesday, September 3, 2024. Shares of Hindustan Aeronautics Limited to Mazagon Dock Shipbuilders to Garden Rich Shipbuilders are trading with a jump of about 7 per cent. On Monday, September 2, the Cabinet Committee on Security Affairs has approved the purchase of 240 aero-engines for the Indian Air Force's Sukhoi MKI-30 (Su-30 MKI) fighter aircraft from Hindustan Aeronautics Limited for Rs 26,000 crore, due to which HAL's stock is seeing a tremendous jump. At the same time, a meeting of the Defense Acquisition Council is going to be held under the chairmanship of Defense Minister Rajnath Singh, due to which there is a bumper rise in defense stocks. 

Defense Acquisition Council meeting today

The Defense Acquisition Council is scheduled to meet on September 3, 2024 under the chairmanship of the Defense Minister, in which discussions are expected to be held on preparing seven advanced frigates for the Navy. Apart from this, there is also a possibility of discussion in the meeting on replacing T-72 tanks with 1700 modern Future Ready Combat Vehicles. This is the reason why defense stocks and especially shipyard stocks are rising before the meeting.   

Shipyard companies will get orders for new warships!

The Indian Navy Bravo 17 project involves the acquisition of seven new warships, which will be the most advanced frigates ever built in India after the Nilgiri class frigates under construction. For this, the Defense Acquisition Council can issue a tender of Rs 70,000 crore to Indian shipyard companies under the Make in India initiative. Mazagaon Dock Shipbuilders, Garden Reach Shipbuilders, Goa Shipyard Limited can be major beneficiaries of this. Goa Shipyard Limited is not listed on the stock exchange.  

Bumper rise in defense shares

Due to these news, the stock of Mazagon Dock Shipbuilders is trading at Rs 4473 with a jump of 6.51 percent. The stock of Garden Rich Shipbuilders is up by 5.34 percent and the stock is trading at Rs 1928. The stock of Cochin Shipyard is up by 2.73 percent and the stock is trading at Rs 1901. 

HAL stock can give 27% return

Hindustan Aeronautics' stock is trading at Rs 4857 with a jump of 3.51 percent due to the order of 240 aero-engines for Sukhoi MKI-30 (Su-30 MKI) fighter aircraft. Brokerage house Antique has advised investors to buy HAL shares for a target of Rs 6145, i.e. the stock can give a return of up to 27 percent from its current level.