BEL shares jump amid Rs 2,200-crore Indian Air Force order buzz

Bharat Electronics Ltd (BEL) is likely to win a deal to the tune of Rs 2,000-2,200 crore from the Indian Air Force (IAF), sources told Zee Business. The IAF is set to induct the MK-2 low-level light weight radars to its fleet, they said. 

Bharat Electronics shares ended higher by Rs 8.7, or 3.0 per cent, at Rs 293.7 apiece on BSE amid a broad-based surge across Dalal Street.

At the time of publishing this report, Zee Business's queries sent to BEL remained unanswered.

MK-2 are light-weight and, hence, easy-to-transport radars. 

This will be an upgraded version of similar radars already produced by BEL, according to sources. 

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The Indian Air Force has already issued a request for information (RFI) for the deal.

The issuance of RFI is an initial step in the defence procurement process. It involves the organisations under the Ministry of Defence gathering the necessary information from potential vendors to understand the prospects of potential projects.

Over the next 12-14 months, the deal will likely be sanctioned by the Defence Acquisition Council (DAC), the national body responsible for the procurement of defence equipment, followed by the Cabinet Committee on Security's approval, said the sources.

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Should you enter the defence space on Dalal Street now? 

Many analysts have positive views on the country's defence space citing long-term demand visibility. 

"Defence can be a big contributing sector for the economy... Most of defence-related companies have robust order books and strong cash flows," Vijay Chopra, MD and CEO, Enoch Ventures, told Zee Business. 

In the coming decade, the defence sector is going to be a major contributor to the country's GDP, said Chopra. 

Which stocks to invest in from a long-term perspective?

Chopra is bullish on BEL, Hindustan Aeronautics Ltd (HAL), Cochin Shipyard, Bharat Earth Movers Ltd (BEML) and Mazagon Dock for the long term. 

The demand will continue to grow for the entire defence sector in the long run," he added. 

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