Global brokerage Goldman Sachs highlighted a positive surprise in India’s FY27 defence budget, noting higher-than-estimated allocations and strong execution trends in the current year, which could have direct implications for defence-linked stocks.
According to Goldman Sachs, the overall defence budget for FY27 has been set at ₹7.85 lakh crore, reflecting a 7% year-on-year increase and coming in ahead of its estimate of ₹7.75 lakh crore. The brokerage also pointed out that FY26 defence spending is tracking 8% higher than the Budget Estimate, indicating strong execution on the ground.
A key highlight flagged by Goldman Sachs is the sharp rise in capital procurement. FY27 capital procurement spending is projected at ₹2.19 lakh crore, marking an 18% YoY increase and significantly exceeding the brokerage’s estimate of ₹1.97 lakh crore.
Spending on other equipment such as missiles, ammunition, radar systems and electronics has emerged as another standout. Goldman Sachs noted that allocations for this segment have risen 62% YoY to ₹82,200 crore, making it one of the most notable components of the budget.
On the stock front, Goldman Sachs said the direct beneficiaries of higher defence spending include Solar Industries, Bharat Electronics (BEL) and Bharat Dynamics. The brokerage also highlighted trickle-down opportunities in companies such as Astra Microwave and Data Patterns.
In the aerospace segment, Goldman Sachs noted that the basic customs duty (BCD) exemption is a positive development for companies including PTC Industries and Azad Engineering.
Disclaimer: This article is based solely on the brokerage inputs provided. The views expressed are those of the brokerage and do not constitute investment advice or recommendations by the publication.
