Defence stocks rallied sharply on Thursday following a major move by the Aeronautical Development Agency (ADA), which invited Indian companies to participate in the development of the indigenous fifth-generation stealth fighter jet, the Advanced Medium Combat Aircraft (AMCA). Shares of DCX Systems and Paras Defence surged over 6%, while Bharat Dynamics and Mazagon Dock Shipbuilders gained more than 2% each, reflecting strong investor interest.
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The ADA, functioning under the Ministry of Defence, issued an Expression of Interest (EOI) on Wednesday seeking technically capable Indian companies to support the development, prototyping, flight testing, and certification of the AMCA. The contract duration for the full execution of the AMCA programme is capped at eight years.
This move follows Defence Minister Mr. Rajnath Singh’s approval of the AMCA Programme Execution Model last month, marking a significant push toward defence indigenisation. The programme is a critical step in bolstering India’s aerospace capabilities and is expected to generate considerable opportunities for domestic defence firms.
Analysts noted that growing geopolitical tensions, including the Israel-Iran conflict, recent India-Pakistan skirmishes, and the ongoing Russia-Ukraine war, have increased expectations of higher defence spending and new orders. Additionally, improved financial performance in Q4 FY25 and continued policy support for indigenisation are fuelling bullish sentiment in defence sector stocks.
About Mazagon Dock Shipbuilders Ltd
MDL, headquartered in Mazagaon, Mumbai, is a premier defence public sector undertaking under the Ministry of Defence. The shipyard specializes in the construction of warships, submarines, and a range of offshore platforms and vessels. MDL plays a pivotal role in advancing India’s naval capabilities and supports the Government of India’s ‘Make in India’ initiative through its indigenous shipbuilding efforts.
