Cochin Shipyard, BEL, BEML, HAL and other defence stocks rally after extension in customs duty exemption for 5 years: Read to know why

financialexpress.com:

Defence stocks like Hindustan Aeronautics, Bharat Dynamics, Bharat Electronics and others are in focus after the government granted an extension in the exemption of customs duty on the imports of certain parts. Initially set to expire on July 1, 2024, the exemption has now been extended for five years, until 2029. So how does it impact the stocks? 

The exemptions cover categories including military helicopters with an empty weight of more than 3,500 kg, associated role equipment, ground support equipment, ground handling equipment, and other specified categories.

In the Union Budget of 2019, Finance Minister Nirmala Sitharaman proposed exempting defence equipment not manufactured in India from customs duty to “secure our borders.” This move aligns with the ongoing focus on Public Sector Undertakings (PSUs) and the hope of securing more orders in the medium to long term.

Defence Minister Rajnath Singh has set an ambitious target for India’s defence exports, aiming for Rs 50,000 crore by 2028-2029. In the financial year 2024, defence exports reached a record high of Rs 21,083 crore. 

As a result, defence stocks have been in focus throughout the year, reflecting the positive sentiment around PSUs and the sector’s growth potential.

In terms of stock performance, HAL shares have demonstrated positive returns across multiple time frames. Over the past month, the stock has given a commendable 2% return, showcasing its stability and growth potential. The last six months have seen even more impressive results, with a substantial increase of 86.46%, indicating a strong upward trend. 

Year-to-date, HAL shares have surged by 88%, reinforcing the stock’s positive momentum in the current fiscal year. Looking at the broader picture,