Jefferies flags $60-bn defence spending opportunity for Indian firms

Jefferies has unveiled a bullish outlook on India's defence sector, identifying a $60-billion opportunity as the country scales up military capital spending over the coming years. The brokerage projects domestic defence capital expenditure will grow at a compound annual growth rate of 16% through fiscal year 2030, reflecting New Delhi's sustained focus on defence modernisation and indigenous manufacturing capabilities.

The investment bank has initiated coverage on two Indian defence players—Solar Industries India and Astra Microwave Products—assigning 'Buy' ratings to both companies. The move signals analyst confidence in the sector's trajectory and the prospects of established players positioned to capture demand from India's expanding defence budget.

Solar Industries, a diversified defence manufacturer, and Astra Microwave, a specialist in microwave sub-systems and components, are seen as well-positioned beneficiaries of India's push toward self-reliance in defence production. The outlook reflects broader trends of increased military spending and the government's emphasis on boosting domestic procurement to reduce import dependence.

The identified opportunity underscores India's strategic commitment to strengthening its defence industrial base amid evolving regional security dynamics. With capital expenditure projected to grow faster than overall defence spending, manufacturers catering to modernisation initiatives in platforms, systems, and equipment are expected to see sustained demand over the planning horizon.