Defence stocks such as HAL, BEL, and others are set to be in the spotlight as Defence Minister Rajnath Singh embarks on a significant visit to the United States from August 23-26, 2024. The visit, upon the invitation of US Secretary of Defence Lloyd Austin, aims to strengthen the India-US Comprehensive Global Strategic Partnership.
A key focus of Singh’s visit will be to address delays in critical defence deals that are crucial for India’s military modernization. One of the pressing issues is the delay in the delivery of General Electric’s F404 engines, which are essential for Hindustan Aeronautics Limited (HAL) to meet its production targets for the Tejas Mark-1A fighter jets. Singh is expected to push for an expedited delivery schedule to ensure HAL can fulfil its commitments to the Indian Air Force.
In addition to addressing these delays, Singh’s visit is also geared towards finalizing several high-profile defence agreements. Among the most notable is the multi-billion-dollar deal for 31 MQ-9B High Altitude Long Endurance (HALE) unmanned aerial vehicles (UAVs) and the license production of the GE F414 engine in India. The MQ-9B deal, valued at approximately $3.99 billion, includes 15 Sea Guardians for the Indian Navy and 16 Sky Guardians for the Indian Army and Air Force. The recent amendments to the deal have increased the indigenous content, highlighting a commitment to enhancing local defence capabilities.
As these developments unfold, stocks of companies like HAL, BEL, and BDL (Bharat Dynamics) are expected to draw attention from investors.
