Finally the parliament has given the approval for 49% FDI in defense. There are lots of companies that have exposure in defense sector and they will be benefited from this FDI in defense. The prominent defense stocks are Tata motors, Ashok leyland, Larsen and Tubro, Mahindra & Mahindra, Bharat Forge, Pipavav Defence, Titagarh Wagons, MRF etc
Best defense stocks for Investment after FDI in defense
1. Mahindra & Mahindra
It has five operational companies under defense. It is the only business house in India that is engaged in projects meant for all the three wings of the armed forces – the army, navy and air force. The company is in race for Future Infantry Combat Vehicle (FICV). They have also tied up with Austrian company called Steyr which manufactures guns.
Tata motors have around 13 subsidiary companies working in defense sector. Tata Advanced Systems, for instance, makes airframe components for the C-130J heavy-lift transport military aircraft, while Tata Power SED has worked on integrated guided missile systems and multi-barrel rocket launchers. Tata motors has developed a 12X12 truck (the second of its kind in the world), which can haul inter-ballistic missiles to any part of the country. The company is eyeing orders for FICV, light-strike vehicle, light-support vehicle, troop carriers, and light-armoured multipurpose vehicle. Its one of the best defense stock for investment.
3. Ashok Leyland
Ashok Leyland is the front runner for high-mobility, multi-purpose personnel carriers like the Humvee. Ashok leyland has been supplying the Stallion military truck to the army. It has recently forged a tripartite agreement to manufacture mounted gun systems with French gun-maker Nexter and engineering giant Larsen & Toubro. Ashok Leyland supplies several vehicles for various applications, such as troop carriers, refuellers, vehicles for gun mounting, fire-fighting, UAV support and recovery vehicles, flat-bed trucks and buses, to the Air Force and Navy as well as to para-military forces.
4. Larsen & Tubro
Apart from the tripartite agreement to manufacture mounted gun systems the company is also involved in manufacturing Weapons launchers, submarines, radars and unmanned aerial vehicles.
5. Pipavav defense
The government wants to replace the 56 Avro transport aircraft bought in the 1960s. Pipavav defense including with other players is eyeing the contract that is worth over Rs 60,000 crore. Pipavav is in the advanced stages of bagging an Indian Navy contract to modernise or replace up to 100 ships over the next decade. The Australian unit of Swedish giant SAAB is assisting Pipavav in this venture under a technical partnership agreement.
6. Bharat Forge
Bharat Forge, is in the process of developing mine-protected vehicles, a ground penetrating radar and ultralight gun system. Its the top forging company in the country and all defense manufacturing required metal forming.
All defense vehicles requires tyres and MRF is the top manufacturer of heavy duty tyres. It has recently started supplying tyre for fighter jets to Indian Air force and can get more order from Army as well after this FDI in defense.