Indian Army's ₹30,000 Crore QRSAM Tender Boosts Defence Sector

1 min read     Updated on 29 Sept 2025, 12:36 PM
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Overview

The Indian Army has issued a ₹30,000 crore tender to Bharat Electronics Ltd. (BEL) for Quick Reaction Surface-To-Air Missiles (QRSAM) air defence systems. The order includes five to six regiments of indigenously developed 'Anant Shastra' systems. BEL will be the lead integrator, with execution expected to start in FY2027. This could push BEL's order book past ₹1 lakh crore. Other beneficiaries include Bharat Dynamics, Apollo Micro, and Astra Micro. The tender strengthens India's air defence capabilities and boosts domestic defence manufacturing.

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*this image is generated using AI for illustrative purposes only.

In a significant move for India's defence sector, the Indian Army has issued a substantial tender worth ₹30,000 crore to Bharat Electronics Ltd. (BEL) for the procurement of Quick Reaction Surface-To-Air Missiles (QRSAM) air defence systems. This development is set to strengthen India's air defence capabilities while providing a major boost to domestic defence manufacturing.

Tender Details

The procurement involves five to six regiments of indigenously developed 'Anant Shastra' surface-to-air missile weapon systems. BEL, a leading defence electronics company, will serve as the lead integrator for this project. The execution of this significant order is expected to commence in the financial year 2027.

Impact on BEL and Other Defence Companies

This massive order is poised to have a substantial impact on BEL's order book. Currently standing at ₹74,589.00 crore, the addition of this ₹30,000.00 crore tender could potentially push BEL's order book past the ₹1 lakh crore mark, signifying a major milestone for the company.

The ripple effect of this tender extends to other players in the defence manufacturing ecosystem:

Company Expected Order Value (₹ in crore) Components
Bharat Dynamics 10,500.00 - 12,000.00 Missiles
Apollo Micro 800.00 - 1,000.00 Computer and navigation systems
Astra Micro 1,800.00 - 2,000.00 Subsystems and TR Modules

Other contributors such as Axiscades, Data Patterns, and Paras Defence are also expected to participate in the order, although specific figures were not provided.

Implications for India's Defence Sector

This tender underscores India's commitment to strengthening its air defence capabilities through indigenous development and manufacturing. The 'Anant Shastra' QRSAM system, being an indigenously developed solution, aligns with the country's push for self-reliance in defence production.

The distribution of the order across multiple domestic defence companies highlights the collaborative nature of India's defence manufacturing ecosystem. It not only boosts the order books of these companies but also promotes technological advancement and expertise within the country's defence industry.

As the project moves forward, it will be interesting to observe how this significant tender impacts the financial performance and growth trajectories of the involved companies, particularly BEL as the lead integrator. The successful execution of this project could potentially open doors for more such orders in the future, further solidifying India's position in the global defence manufacturing landscape.

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Unimech Aerospace Leads Defence Stocks with 291x P/E Ratio as Sector Trades at Premium Valuations

2 min read     Updated on 24 Sept 2025, 10:13 AM
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Overview

The Indian defence sector is experiencing a surge in stock valuations, with Unimech Aerospace & Manufacturing leading the Nifty India Defence Index at a P/E ratio of 291.00. Most stocks in the index are trading above industry multiples, driven by robust order books, supportive government policies, rising exports, and favorable geopolitical conditions. Analysts project an average 32% return for FY26, with 16 out of 18 stocks expected to deliver double-digit returns. However, Garden Reach Shipbuilders, Cyient DLM, and Hindustan Aeronautics are trading below industry P/E ratios.

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*this image is generated using AI for illustrative purposes only.

The Indian defence sector is witnessing a surge in stock valuations, with Unimech Aerospace & Manufacturing emerging as the frontrunner in the Nifty India Defence Index. The company's stock is currently trading at a staggering trailing 12-month price-to-earnings (P/E) ratio of 291.00, nearly six times the industry average, making it the most expensive stock among the 18 constituents of the index.

Premium Valuations Across the Defence Sector

The trend of high valuations is not limited to Unimech Aerospace. Other prominent players in the defence sector are also trading at significant premiums to their industry benchmarks:

Company Trading Multiple
Bharat Dynamics 2.10x industry P/E
Solar Industries 2.80x industry P/E

In fact, 12 other defence stocks within the Nifty India Defence Index are trading above their respective industry multiples, underscoring the sector-wide phenomenon of premium valuations.

Factors Driving High Valuations

Analysts attribute the elevated valuations in the defence sector to several key factors:

  1. Robust Order Books: Companies in the sector are benefiting from strong order inflows.
  2. Supportive Government Policies: The Indian government's focus on defence modernization and indigenization is boosting the sector.
  3. Rising Exports: Increasing defence exports are opening up new revenue streams for companies.
  4. Strategic Tailwinds: The global geopolitical situation is creating favorable conditions for the defence industry.

Exceptions to the Trend

While most stocks in the index are trading at premium valuations, there are a few exceptions:

  • Garden Reach Shipbuilders
  • Cyient DLM
  • Hindustan Aeronautics

These three companies are currently trading below their respective industry P/E ratios, potentially offering value opportunities for investors.

Future Outlook

The defence sector's growth prospects appear promising, with analysts projecting an average return of 32.00% for FY26. Notably, 16 out of the 18 stocks in the Nifty India Defence Index are expected to deliver double-digit returns.

Company Highlights

Unimech Aerospace & Manufacturing

  • Market Capitalization: Rs 5,360.00 crore
  • Serves aerospace, energy, and semiconductor industries

Solar Industries

  • Manufactures Unmanned Aerial Systems (UAS), drones, and ammunition

Bharat Dynamics

  • Specializes in building guided missile systems for Indian Armed Forces

Investor Considerations

While the high valuations reflect positive sentiment and growth expectations for the defence sector, investors should exercise caution. The significant premium on these stocks suggests that much of the future growth potential may already be priced in, potentially limiting short-term upside.

As the defence sector continues to evolve under India's push for self-reliance and modernization, investors would do well to closely monitor policy developments, order book trends, and export performance of these companies to gauge the sustainability of their current valuations.

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