Business As Unusual: India’s Defence PSUs Record Spurt In Growth, In Light Of Current Geopolitical Situation

The defence sector in India is picking up with the encouraging performance of public sector undertakings (PSUs) in the third quarter. Eight defence PSUs, as against only two per cent year-on-year growth in sales in June quarter, have shown an aggregate 12 per cent spurt in sales in the third quarter, reports The New Indian Express.

According to the report, analysts expect the trends to be favourable in the subsequent quarters too on the back of a healthy order book providing revenue visibility and increasing emphasis on execution in the light of recent geopolitical uncertainty.

Defence PSUs like Garden Reach Shipbuilders and Engineers (GRSE) has reported a 116 per cent growth in sales during the third quarter owing to approval of its finished inventory, allowing the company to book more revenue. Other companies such as Bharat Dynamics and Cochin Shipyard has shown 26 and 16 per cent growth respectively.

Hindustan Aeronautics Limited (HAL), however, reported a de-growth in sales, largely due to the cascading effect of payment delays over the last few quarters. Bharat Electronics Limited (BEL), on the other hand, reported a muted growth. It has largely benefited due to the Electronic Voting Machine (EVM) project ahead of elections.

As per the report, the government’s intent to increase domestic procurements in the defence sector is what the defence PSUs are also set on capitalising.