Passive Funds See Record Growth Despite Declining AUM Share

Despite passive investing gaining traction, its share in mutual fund (MF) assets under management (AUM) fell to 16.6% by the end of 2024, down from 17.7% in March 2023. This decline occurred even as inflows, account additions, and new fund launches hit record levels during the year.

Smallcap and Midcap Outperformance Affects Passive Funds

Over the past 2 years, smallcap and midcap stocks have significantly outperformed largecaps. While the Nifty 50 rose 31% during this period, the Nifty Smallcap 100 and Nifty Midcap 100 surged by 93% and 82%, respectively. As a result, passive equity funds, which mostly track large-cap indices like the Nifty 50 and Sensex, delivered lower returns compared to active equity funds.

Shift Towards Active Smallcap and Midcap Funds

The strong performance of smallcap and midcap stocks led to record investments in active smallcap and midcap funds. These funds, along with thematic schemes, boosted the share of active equity funds in total MF AUM from 39% in March 2023 to 46% in December 2024, as per AMFI data.

Tax Changes Impact Passive Debt Funds

Changes in debt fund taxation in April 2023 removed the indexation benefit, reducing inflows into passive debt funds. The AUM of passive debt funds grew only 19%, from ₹1.7 trillion in March 2023 to ₹2 trillion by December 2024.

Record Inflows and Fund Launches Drive Passive Equity Growth

Passive equity funds continued to attract strong inflows, with net inflows reaching ₹1.3 trillion in 2024 compared to ₹71,404 crore in 2023. Passive equity AUM grew 38% in the first 11 months of 2024, reaching ₹8 trillion.

Surge in Fund Offerings Boosts Investor Accounts

The year 2024 saw a record 130 new passive fund launches, which more than doubled index fund accounts to 12.5 million, showcasing the growing interest in passive investing.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

 

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Stocks To Watch Today on January 22, 2025: ICICI Pru, Tata Tech and More

Indian markets are likely to be impacted today, supported by GIFT Nifty futures trading 68 points above Nifty50 futures at 23,171. On Tuesday, the BSE Sensex surged 1,235 points (+1.60%) to close at 75,838.36, while the Nifty50 rose 320 points (+1.35%) to 23,024.65.

Below are key stocks and highlights for today:

  • ICICI Prudential Life Insurance

ICICI Prudential Life Insurance reported a 43.17% YoY rise in Q3 net profit to ₹325.65 crore. The value of new business (VNB) increased by 18.6% YoY to ₹517 crore.

  • Tata Technologies

Tata Technologies saw stable Q3 net profit at ₹169 crore, with revenue increasing marginally to ₹1,320 crore.

  • Jana Small Finance Bank

Jana Small Finance Bank posted a Q3 net profit of ₹111 crore, a decline from the previous year. Revenue rose to ₹1,177 crore, with improvements in Gross NPA to 2.80%.

  • Aditya Birla Real Estate

Aditya Birla Real Estate reported a Q3 loss of ₹42.37 crore compared to a profit of ₹79.95 crore in the same period last year. Revenue fell 16.7% YoY to ₹946.21 crore.

  • PNB Housing Finance

PNB Housing Finance achieved consolidated Q3 net profit of ₹483 crore, with revenue growing to ₹1,942 crore.

  • Jio Financial

Jio Financial further subscribed to Jio BlackRock Asset Management for ₹117 crore.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Should You File ITR in AY 2025-26 if Your Income is Not Taxable? Benefits Explained

As the assessment year 2025-26 approaches, many individuals are unsure whether they should file an Income Tax Return (ITR) if their income falls below the taxable limit. While it may not always be mandatory, filing an ITR can be highly beneficial in several ways.

When Is Filing ITR Mandatory?

Filing an ITR is required if your total income exceeds the basic exemption limit. However, in some cases, even if your income is below the taxable threshold, you may still need to file:

  • Specific Incomes: Income from capital gains or foreign assets may require filing an ITR.
  • Tax Deducted at Source (TDS): If TDS has been deducted, such as on bank interest, filing an ITR lets you claim a refund for the excess tax paid.

Under the old tax regime, a maximum rebate of ₹12,500 is available, while under the new regime, it can go up to ₹25,000. If your income falls within these limits, your tax liability is reduced to zero, but you are still required to file an ITR.

What Is a NIL Return?

A NIL return is an ITR filed when you have no taxable income or financial activity during the year. It informs the Income Tax Department that no taxes were due for the financial year.

Why Should You File an ITR?

1. Proof of Income

An ITR serves as official income proof, essential for applying for loans, visas, or financial transactions requiring proof of earnings.

2. Claim Refunds and Deductions

If TDS has been deducted, filing an ITR lets you claim a refund. Additionally, deductions under sections like 80C and 80D for investments and expenses can further reduce your taxable income.

3. Simpler Loan Approvals

An ITR is widely accepted as proof of income, simplifying the process of securing loans from banks or financial institutions.

4. Carry Forward Losses

Losses from stock market investments or business operations can be carried forward to offset future income, but only if you file an ITR.

5. Eligibility for Government Benefits

Filing an ITR is a prerequisite for availing of certain government schemes, scholarships, or subsidies, ensuring you remain eligible for such benefits.

6. Visa Applications

Many countries require ITR filings as part of the visa application process. A history of filing ITRs shows financial stability, making you a favourable candidate for visa approval.

Conclusion

Even if your income is not taxable for the assessment year 2025-26, filing an ITR can offer numerous benefits, such as claiming refunds, securing loans, and ensuring compliance with tax laws. It’s a simple step toward better financial management and future opportunities.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Budget 2025: What is the Direct Tax Code and Will It Replace the Income Tax Act?

The Indian government is preparing to introduce the long-awaited Direct Tax Code (DTC) to simplify and modernise the country’s tax system. Led by Finance Minister Nirmala Sitharaman, this initiative aims to replace the outdated Income Tax Act of 1961, making tax laws easier to understand and comply with.

Why Is the Direct Tax Code Being Introduced?

The Direct Tax Code is being developed to address the complexity of India’s current tax laws, which are difficult for taxpayers to navigate due to hundreds of sections, exemptions, and deductions. By simplifying these laws, the government hopes to:

  • Encourage compliance: Simpler laws will motivate more people to pay taxes.
  • Improve transparency: A clear tax structure will reduce errors and confusion.
  • Boost the taxpayer base: With an easier system, more individuals and businesses will contribute to the economy.

Key Features of the Direct Tax Code

  1. Simplified Residence Rules
    The DTC will streamline rules for determining the tax liabilities of residents, non-residents, and NRIs, making them easier to understand.
  2. Clarity on Financial and Assessment Years
    The new code aims to resolve the confusion between Financial Year (FY) and Assessment Year (AY) by standardizing terminology.
  3. Unified Tax Rates
    A common tax structure for domestic and international businesses will make India’s tax system more business-friendly.
  4. Reduced Complexity
    The DTC will significantly reduce the number of exemptions and deductions, keeping only the essential ones.
  5. Easier Compliance
    Filing taxes, paying TDS, and meeting deadlines will become simpler, minimising penalties and missed deadlines.

Benefits of the Direct Tax Code

The new tax code is expected to bring significant advantages:

  • Simpler Tax Structure: A streamlined system will make it easier for individuals and businesses to understand and follow tax laws.
  • Increased Compliance: Simplicity will encourage more people to file taxes, reducing the need for audits and penalties.
  • Global Competitiveness: Unified and transparent tax rates will attract foreign investors and businesses.
  • Reduced Disputes: Clearer laws will minimise litigation, ensuring a fairer system for taxpayers.

Progress and Implementation Timeline

The Direct Tax Code is currently under review, with the government gathering feedback from stakeholders. The draft law is expected to be introduced during the Budget 2025 session, though its final implementation may take months or even longer.

Before the law is enacted:

  • The Ministry of Finance will evaluate public suggestions and inputs from experts.
  • A draft of the proposed code will be shared for further comments.

While the process is ongoing, significant changes to the tax system are anticipated in the coming months.

The Direct Tax Code 2025 is a step toward a modern and simplified tax structure, aiming to make compliance easier for taxpayers and support India’s economic growth.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Major EPF Updates for 2025: Simplified Transfers, CPPS and More

The Employees’ Provident Fund Organization (EPFO) has introduced 5 key updates to make managing your EPF account easier. These changes include a simplified joint declaration process, a new Centralised Pension Payment System (CPPS), guidelines for higher pensions, easier member profile updates, and smoother PF transfers. Here’s a closer look:

1. Simplified Joint Declaration Process

The EPFO has revised its Joint Declaration guidelines, replacing the earlier SOP Version 3.0 issued in July 2024. The updated process classifies members into three groups for easier handling:

  • Members with Aadhaar-based UANs (post-October 2017): Requests are processed online.
  • Members with UANs validated by Aadhaar (pre-October 2017): Requests are also processed online.
  • Members without Aadhaar-validated UANs or deceased members: Requests are submitted physically.

This streamlined approach ensures more efficient claim processing.

2. Centralised Pension Payment System (CPPS)

The CPPS, implemented from January 1, 2025, simplifies pension payments through a centralised system managed by the National Payments Corporation of India (NPCI). Key features include:

  • Pension payments to any bank account across India, removing branch restrictions.
  • Aadhaar-linked UAN-KYC to reduce errors.
  • No transfer of Pension Payment Orders (PPOs) between regional offices after January 2025.

This system aims to make pension processing faster and error-free.

3. Clarifications on Higher Pension

EPFO has clarified policies for processing higher pension cases under the Employees’ Pension Scheme (EPS). These updates address concerns raised by field offices and focus on:

  • Fair pension calculation for all categories.
  • Adhering to trust rules for exempt establishments.
  • Clear processes for dues and pension arrears to avoid confusion.

These clarifications ensure transparency and consistency in pension handling.

4. Easier EPF Member Profile Updates

EPFO has simplified the process for updating member profiles. Members with Aadhaar-verified UANs can update personal details like name, gender, date of birth, marital status, and more online without uploading documents. For UANs issued before October 1, 2017, employer certification is needed in certain cases.

This update reduces paperwork and speeds up profile changes.

5. Hassle-Free PF Transfers

Transferring your Provident Fund (PF) account is now easier, especially when changing jobs. Transfers no longer require approval from your past or present employer in the following cases:

  • Within the same UAN (post-October 2017): Linked with Aadhaar.
  • Between different UANs (post-October 2017): Linked with the same Aadhaar.
  • Within the same UAN (pre-October 2017): Aadhaar-linked with identical details.
  • Between different UANs (pre-October 2017): At least one UAN linked with Aadhaar and identical details.

These changes make PF transfers quicker and more convenient for employees.

By implementing these updates, EPFO aims to enhance user experience, simplify processes, and ensure faster service delivery for all its members.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

 

How to Turn Your PPF Investment into ₹80 Lakh and a ₹48,000 Monthly Pension?

The Public Provident Fund (PPF) is a reliable savings scheme backed by the Indian government, available through post offices and banks. It’s a favourite among risk-averse investors seeking long-term wealth creation. With its tax-free returns, guaranteed safety, and compounding benefits, PPF stands out as a top choice for securing your financial future.

By using the PPF 15+5+5 formula, combined with disciplined savings and compounding power, you can plan a steady, inflation-resistant income stream of nearly ₹48,000 per month for your retirement years.

How Does the 15+5+5 Formula Work?

This strategy involves investing in PPF for the initial 15 years, followed by 2 extensions of 5 years each. By letting your investment grow for 25 years, you can build substantial wealth.

Example: Wealth Creation Over 25 Years

Initial 15 Years

  • Annual Investment: ₹1.5 lakh
  • Total Deposits: ₹22.5 lakh
  • Corpus After 15 Years: ₹40.68 lakh

First 5-Year Extension (No Additional Investment)

  • Interest Earned: ₹16.64 lakh
  • Total Corpus After 20 Years: ₹57.32 lakh

Second 5-Year Extension

  • Interest Earned: ₹23.45 lakh
  • Total Corpus After 25 Years: ₹80.77 lakh

With consistent investments and compounding, your PPF balance grows significantly over 25 years.

Convert PPF Savings into a Monthly Pension

Once your PPF account matures, you can withdraw the annual interest as a pension:

  • Corpus After 25 Years: ₹80.77 lakh
  • Annual Interest (7.1%): ₹5.73 lakh

Monthly Pension: ₹47,794

Why Choose PPF for Long-Term Savings?

1. Safety and Steady Growth

PPF combines the safety of government backing with the power of compound interest. Your investments earn an annual interest of 7.1% (as of now), which is compounded yearly, ensuring steady growth.

2. Tax-Free Benefits

PPF offers tax advantages under the Exempt-Exempt-Exempt (EEE) category:

  • Deposits qualify for tax deductions under Section 80C.
  • Interest earned is tax-free.
  • The maturity amount is exempt from taxes.

3. Flexible Investments

You can invest as little as ₹500 annually, making it accessible to all income groups. The maximum annual deposit is capped at ₹1.5 lakh, encouraging disciplined savings. PPF caters to various investors, including salaried employees, homemakers, and small entrepreneurs.

4. Extend Your PPF Account for Long-Term Growth

PPF accounts mature after 15 years but can be extended in 5-year blocks indefinitely. Here’s how it works:

  • Without further investments: Interest at 7.1% continues to accrue on the balance. You can withdraw any amount once a year.
  • With additional investments: Your corpus grows further with interest compounding, and you can withdraw up to 60% of the total balance annually.

In conclusion, PPF emerges as a robust long-term savings and retirement planning tool. By leveraging the 15+5+5 formula and its tax-free benefits, PPF can help build a substantial retirement corpus.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Kalyan Jewellers Share Slips 7%, Hits 6-Month Low; Falls 38% in 13 Days

Kalyan Jewellers share price dropped to a 6-month low of ₹491.25 on the BSE, declining 7% during Tuesday’s intra-day trade. This erased the gains recorded on Monday, as promoters pledged additional shares amounting to 3.5% of the company’s total equity.

Promoters Pledge Additional Shares

The company disclosed that Ramesh Trikkur Kalyanaraman pledged 17.03 million shares (1.65% stake), and Seetharam Trikkur Kalyanaraman pledged 19.12 million shares (1.85% stake). These shares were pledged to financial institutions such as Catalyst Trusteeship, Bajaj Finance, Aditya Birla Finance, Tata Capital, Infina Finance, STCI Finance, and HSBC Invest Direct Financial Service for loan facilities.

With this, the total promoter shareholding pledged now stands at 24.89% (15.64% of the total equity). As of December 31, 2024, 19.32% of promoter shares (12.14% of total equity) were pledged.

Warburg Pincus Sells Entire Stake

On August 22, 2024, Warburg Pincus, a private equity firm, sold its entire 9.17% holding in Kalyan Jewellers. The promoters acquired 24.3 million shares (2.36% stake) at ₹535 per share, totalling ₹1,300 crore. 

Stock Price Decline and Allegations

Kalyan Jewellers share price fell below its previous low of ₹498.85, recorded on January 17, 2025, wiping out Monday’s 6% gain. Over 13 trading days, the stock has plunged 38%, despite the company denying rumours about corporate governance issues, share pledges, auditor concerns, and collusion with fund managers to influence market prices.

Performance Overview

Kalyan Jewellers hit an all-time high of ₹794.60 on January 1, 2025, more than doubling its market value over the last 2 years. In CY23, the stock surged 180%, and in CY24, it gained 116%. In comparison, the BSE Sensex rose 20% in CY23 and 9% in CY24.

Since its market debut on March 26, 2021, the stock has climbed 465% from its issue price of ₹87, despite a sharp correction from its peak.

Kalyan Jewellers India Ltd

Kalyan Jewellers India Ltd designs, manufactures and sells a wide range of gold, studded, and other jewellery products catering to different price ranges. As of FY20, it was one of India’s largest jewellery retailers by revenue. The company was founded by its Chairman, Managing Director, and Promoter, Mr T.S. Kalyanaraman.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

What is the Fitment Factor in the 8th Pay Commission?

The Union Cabinet approved the 8th Pay Commission last week, which is set to be implemented starting January 1, 2026. A major part of this revision is the Pay Matrix, which organises salaries based on various job levels. 

One important factor in this calculation is the fitment factor, which decides how much the basic pay will increase. Let’s understand more about the 8th pay commission fitment factor, how the fitment factor is calculated, and how government employees will benefit. 

Fitment Factor Meaning

The fitment factor is a multiplier used to calculate government employees’ salaries and pensions. It is determined by considering various factors such as inflation, employee needs, and the government’s financial capacity.

How Fitment Factor is Calculated?

The fitment factor is calculated by dividing the revised basic pay by the current basic pay (inclusive of grade pay). It determines how much the salary is increased in the new pay structure. For example, if the current basic pay is ₹18,000 and the revised basic pay is ₹51,480, the fitment factor would be 2.86 (₹51,480 ÷ ₹18,000).

Potential Salary Hike: What to Expect from 8th Pay Commission?

While the government hasn’t disclosed the exact salary hike percentage, as per reports, the “fitment factor” could increase from 2.57 to 2.86, if this happens, the minimum basic salary for government employees may rise from ₹18,000 to ₹51,480 per month, nearly tripling their earnings.

Previously, the 7th Pay Commission, effective from January 1, 2016, increased the salaries of central government employees by a factor of 2.57, meaning their pay was multiplied by 2.57 times. It also raised the minimum basic salary to ₹18,000, up from ₹7,000 in the 6th Pay Commission, while the minimum pension increased from ₹3,500 to ₹9,000.

The 6th Pay Commission, which began in January 2006, applied a 1.86 fitment factor, raising the minimum basic salary from ₹2,750 under the 5th Pay Commission to ₹7,000. Additionally, the minimum pension was increased from ₹1,275 to ₹3,500.

To learn more about the expected changes in the 8th Pay Commission and how salary adjustments are calculated for central government employees, click here.

What is a Pay Commission?

The Pay Commission is a body set up every 10 years to review and recommend changes to the salary, perks, bonuses, and allowances of government employees. The recommendations of the 7th Pay Commission, formed in 2014, have been in effect since January 1, 2016.

Since its inception in 1946, there have been 7 Pay Commissions. The 8th Pay Commission aims to align employee benefits with current economic conditions.

How Many People Will Benefit?

Approximately 50 lakh central government employees, including defence personnel, will benefit from the 8th Pay Commission’s recommendations. Additionally, around 65 lakh pensioners, including defence retirees, are expected to see an increase in their pensions.

The 8th Pay Commission is set to bring financial changes for millions of government employees and retirees across India.

To learn more about the 8th Pay Commission’s expected salary changes, click here.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Top Gainers and Losers on January 20, 2025: Kotak Bank, Wipro Surge, SBI Life Drops

On January 20, 2025, the Indian stock markets ended the day on a positive note. The Sensex, a 30-stock index, rose by 454 points or 0.59%, closing at 77,073.44. It traded between 76,584.84 and 77,318.94 during the day.

Similarly, the NSE Nifty50 also closed higher at 23,344.75, gaining 141 points or 0.61%. The Nifty50 reached a high of 23,391.10 and a low of 23,170.65.

As of January 20, 2025, the top gainers and losers for the day are:

Top Gainers of the Day

Symbol Open High Low LTP %chng
KOTAKBANK 1,890.00 1,929.90 1,866.00 1,918.00 9.06
WIPRO 302.00 305.40 296.95 300.5 6.58
BAJFINANCE 7,182.10 7,470.00 7,182.10 7,427.50 3.42
BAJAJFINSV 1,686.30 1,738.00 1,674.40 1,737.00 3.35
NTPC 326.20 337.00 324.55 334.95 2.7

  • Kotak Mahindra Bank

Kotak Mahindra Bank share price opened at ₹1,890.00, reached a high of ₹1,929.90, and closed at ₹1,918.00, up by 9.06%.

  • Wipro

Wipro share price started at ₹302.00, peaked at ₹305.40, and ended at ₹300.50, registering a 6.58% rise.

  • Bajaj Finance

Bajaj Finance share price opened at ₹7,182.10, touched ₹7,470.00, and closed at ₹7,427.50, gaining 3.42%.

  • Bajaj Finserv

Bajaj Finserv share price started at ₹1,686.30, reached ₹1,738.00, and ended at ₹1,737.00, up by 3.35%.

  • NTPC

NTPC share price opened at ₹326.20, hit ₹337.00, and closed at ₹334.95, up by 2.7%.

Top Losers of the Day

Symbol Open High Low LTP %chng
SBILIFE 1,547.80 1,547.80 1,487.30 1,497.00 -2.82
TRENT 6,210.00 6,225.00 6,074.05 6,079.95 -2.2
SHRIRAMFIN 511.00 521.50 493.35 516.1 -1.98
HDFCLIFE 642.00 644.05 630.55 633.6 -1.34
ADANIPORTS 1,172.00 1,172.00 1,146.50 1,148.45 -1.29

  • SBI Life Insurance Company 

SBI Life share price opened at ₹1,547.80, dropped to ₹1,487.30, and closed at ₹1,497.00, down by 2.82%.

  • Trent

Trent share price opened at ₹6,210.00, hit a low of ₹6,074.05, and closed at ₹6,079.95, down by 2.2%.

  • Shriram Finance

Shriram Finance share price opened at ₹511.00, fell to ₹493.35, and ended at ₹516.10, losing 1.98%.

  • HDFC Life Insurance Company

HDFC Life share price started at ₹642.00, touched a low of ₹630.55, and closed at ₹633.60, down by 1.34%.

  • Adani Ports

Adani Ports share price opened at ₹1,172.00, reached a low of ₹1,146.50, and closed at ₹1,148.45, down by 1.29%.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Bharat Dynamics Reaches 4-Month High with ₹2,960-Crore Order Win

Bharat Dynamics Ltd (BDL) share price have risen significantly, hitting a four-month high of ₹1,344.65, up 5% in Monday’s intra-day trade on the BSE. Over the past 3 days, the stock surged by 19%, fueled by the announcement of a major order worth ₹2,960 crore. This marks the highest level for the stock since September 4, 2024. Previously, the stock reached an all-time high of ₹1,794.70 on July 5, 2024.

New Contract for Medium-Range Surface-to-Air Missiles

On January 16, 2025, BDL revealed that it had secured a contract from the Ministry of Defense (MoD) for the supply of Medium-Range Surface-to-Air Missiles (MRSAM) for the Indian Navy. The deal, valued at ₹2,960 crore, involves MRSAM systems that will be deployed on multiple naval ships and future platforms, reflecting India’s push to strengthen its defence and adopt advanced Indigenous military technology.

Strong Order Pipeline and Growth Potential

With this contract, BDL’s total order intake for FY25 so far has reached ₹3,110 crore, a substantial increase from ₹1,793 crore in FY24. The company’s order backlog stands at an estimated ₹21,000 crore, which is 9.5 times its trailing twelve-month (TTM) revenue, ensuring robust revenue visibility.

 

Despite recent supply chain disruptions that impacted execution and led to a 19% YoY decline in H1 revenue, BDL continues to have a strong order pipeline, including missiles, torpedoes, sonobuoys, and countermeasure systems.

Strategic Importance and Government Support

BDL plays a key role in India’s defence ecosystem as the primary manufacturer of guided missiles, including Akash surface-to-air and Konkur anti-tank guided missiles. The company benefits from government initiatives to boost domestic weapon production and exports. Strong financial support, including healthy order advances, enhances its ability to expand and innovate.

BDL’s strategic importance, solid order book, and focus on self-reliance position it as a crucial player in India’s defence sector. However, timely execution of orders will be vital for sustaining growth.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.