DAC Clears ₹79,000 Crore Defence Orders: When Will HAL, BEL, and Mazagon Dock See Revenue?

The Defence Acquisition Council (DAC) had approved proposals worth ₹79,000 crore on December 29, 2025. This affected stocks like HAL, BEL, and Mazagon Dock Shipbuilders immediately, thereby creating a buzz in the market. While the headline number is eye-catching, investors need to understand that this does not translate into near-term revenue or order book additions.

Instead, these clearances mark the starting point of a long procurement cycle, where financial benefits for companies unfold gradually (often over several years).

What Does ₹79,000 Crore DAC Approval (AoN) Really Mean?

AoN simply indicates that orders are likely in the future, serving as a starting point for the procurement journey. In other words, the Acceptance of Necessity (AoN) only confirms the government’s intent to procure a specific defence equipment. Companies are not allowed to book revenue at this stage, so it doesn’t affect their order books anyhow. 

How Does the Full Timeline of Defence Order Procurement Work? 

• RFP Issuance: After AoN approval, the Ministry of Defence issues RFPs (Requests for Proposals) to shortlisted vendors. These RFPs outline technical requirements, timelines, and compliance standards.
• Trials and Evaluations (12–24 months): Vendors submit prototypes for extensive field trials conducted across deserts, high-altitude areas, mountains, and extreme weather conditions. Large platforms such as aircraft and warships undergo longer and more complex evaluations.
• Commercial Bids and CNC Approval: Companies that clear trials submit commercial bids, after which the Contract Negotiation Committee negotiates pricing, delivery schedules, and long-term maintenance and lifecycle support terms.
• Contract Signing: Following CNC clearance, the final contract is signed, marking the first point at which companies can officially add the order to their firm order books and plan production.

When Will Defence Stocks Show Gains After the ₹79,000 Crore DAC Approval?

Stock market gains in defence companies emerge only after contracts are signed and production begins. Large companies like HAL, Mazagon Dock, and GRSE have a long execution cycle (1-2 years) since they make large aircrafts, warships, and defence vessels. However, companies like BEL and Zen Technologies have shorter execution cycles, which will translate into quicker manufacturing and earlier revenue conversion.

Read more: Tata Group Stocks Recap 2025: How Did TCS, Trent, Titan, and Other Companies Perform This Year?

Conclusion 

The ₹79,000 crore DAC clearance is structurally positive but financially distant. Investors expecting instant order inflows or earnings upgrades may be disappointed in the near term. However, for long-term investors, such approvals strengthen the multi-year growth pipeline for companies like HAL, BEL, Mazagon Dock, and GRSE.

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. 

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