₹79,000-cr defence approval to boost order pipeline: Who gains now and who waits: Harshit Kapadia

The government’s approval of defence procurement proposals worth ₹79,000 crore is set to significantly expand the long-term order pipeline for defence manufacturers, though near-term order inflows will remain limited due to execution timelines, according to Harshit Kapadia, Vice-President at Elara Securities.

Speaking to ET Now, Kapadia said the Defence Acquisition Council (DAC) clearance enhances visibility for both public and private sector players, even as conversion from approval to executable orders typically takes 18–24 months.

Order inflows: Visibility improves, but FY28 key

Kapadia said the ₹79,000 crore approval will boost the order inflow potential for major defence integrators such as Bharat Electronics, Bharat Dynamics and select private players. However, most large-ticket systems—such as Pinaka rocket systems—are unlikely to translate into orders before FY28.


“In FY27, we may see only smaller orders like simulators for light combat aircraft. Larger systems will take longer to move from approval to execution,” Kapadia said.

Defence capex: Additive to emergency procurement

Kapadia clarified that the DAC approval is over and above the earlier emergency procurement tranche of around ₹40,000 crore, parts of which are already under ordering.

“This approval strengthens medium-term force readiness, but near-term requirements are being met through emergency procurement routes,” he added.

Who are the biggest beneficiaries?

According to Elara Securities, the key beneficiaries of the ₹79,000 crore approval include:

• Bharat Electronics – as a lead integrator and system designer
• Solar Industries – for rockets and ammunition
• Bharat Dynamics – for missile-related programmes

These companies are expected to see strong order book accretion once execution begins, particularly in FY28 and beyond.

Boost for MSMEs and defence startups

Kapadia highlighted that recent policy changes under the Defence Procurement Manual (DPM), including 25% procurement reservation for MSMEs and removal of bid security requirements, will meaningfully benefit defence startups and small-cap players.

“PSUs will act as lead integrators, while MSMEs and private defence startups will supply components. Over time, the inflow to private players could exceed that of PSUs,” he said.

Companies such as Zen Technologies and Data Patterns stand to gain from this ecosystem-led approach.

Role of large private integrators

Kapadia said large private defence groups such as Larsen & Toubro, Tata Advanced Systems and Adani Defence are increasingly participating as lead integrators in technologically complex projects, often through collaborations with global OEMs.

“The ecosystem is now clearly split between PSUs, large private integrators, and smaller component suppliers,” he said.

Indigenisation and export push

Nearly 90% of the ₹79,000 crore approval is expected to be sourced through indigenised routes, driving domestic design and development.

“Primary benefits will accrue to PSUs like Bharat Electronics, while companies such as Astra Microwave, Apollo Micro Systems and other niche suppliers will see secondary benefits,” Kapadia noted.

On exports, he said missiles are currently the main focus, with helicopters and aircraft exports still at a discussion stage.

MRO: Long-term structural opportunity

Kapadia added that rising indigenisation will also drive growth in maintenance, repair and overhaul (MRO) services, as spares and lifecycle support form a large portion of defence budgets.

“As more systems are built locally, MRO will increasingly be done in India. This is a long-gestation but structurally strong opportunity,” he said.