Defence stock to buy for 20% upside, a play on defence electronics upcycle
The investment case is driven by an addressable opportunity of about Rs 25,000 crore across key programmes, with management targeting Rs 8,000-10,000 crore of order wins over the next five years.
- Aug 25, 2026,
- Updated Aug 25, 2026 3:26 PM IST
Antique Stock Broking has initiated coverage on Astra Microwave Products Ltd with a 'Buy' rating and a target price of Rs 2,000, valuing the company at 47 times H1FY29 earnings per share. The target suggests 20 per cent potential upside. The brokerage said the defence manufacturer is positioned to benefit from the rising importance of air defence and electronic warfare, supported by its order pipeline, research and development capabilities, and infrastructure.
On Tuesday, the stock was trading 2.5 per cent higher at Rs 1,706.60 on BSE.
According to Antique, the investment case is driven by an addressable opportunity of about Rs 25,000 crore across key programmes, with management targeting Rs 8,000-10,000 crore of order wins over the next five years. It also pointed to Astra Microwave's order book of about Rs 4,300 crore, with more than 90 per cent BTS orders, giving revenue visibility of around 3.5 years, and to the planned rise in the share of complete systems in revenue from 15 per cent to 50 per cent over the next three to five years, which it said could support margin stability and expansion in return on capital employed.
Antique said Astra Microwave has more than 30 years of domain experience and over 635 research and development personnel. It added that the company has six facilities, in-house testing capabilities, and expertise across RF and microwave, digital electronics, and MMIC technologies. Its capabilities include developing GaN/GaAs MMICs up to 40GHz, Active Antenna Array Units for Uttam AESA, and electronic warfare and radar systems, which the brokerage said strengthen its position in next-generation defence programmes.
The brokerage said Astra Microwave has a presence across radar electronics, electronic warfare, satellite communication and weather surveillance technologies, and is likely to participate in high-value programmes including QR-SAM, Virupaksha and software-defined radios. It noted that the company recently announced an Rs 2,200 crore billion order for the delivery of 122 Active Antenna Array Units and 121 interface frames for Uttam Radar.
After this order, Antique said, the company's order book stood at about Rs 4,350 crore, up 130 per cent year-on-year, and had doubled following the Uttam Radar AAAU win. It added that more than 90 per cent of the order book comprises BTS orders, implying higher value addition and margins, and revenue visibility of nearly three years.
Antique also listed other potential opportunities, including QR-SAM orders of INR 7.0-8.0 billion, the Su-30 Virupaksha programme worth INR 30 billion, and Doppler Radar for Mission Mausam. It said Astra Rafael Comsys, the company's joint venture, secured order inflows of about INR 4.0 billion in FY26 and won a further order of about INR 2.5 billion in the first quarter of FY27 for the delivery of software-defined radios to Hindustan Aeronautics Limited.
On restructuring, the brokerage said the proposed demerger of the Defence and Aerospace business from the Space, Meteorology and Hydrology business could sharpen strategic focus, improve capital allocation and help investors assess the growth potential of each business separately.
Antique said it expects profit after tax to grow at a CAGR of 35 per cent over FY26-29E, supported by order inflows and execution of the order book. It added that Astra Microwave's push to move from a subsystems player to a systems developer, with large systems targeted to contribute up to 50 per cent of revenue over the next three to five years from 15 per cent at present, is expected to support revenue, margins and capital efficiency.
Antique Stock Broking has initiated coverage on Astra Microwave Products Ltd with a 'Buy' rating and a target price of Rs 2,000, valuing the company at 47 times H1FY29 earnings per share. The target suggests 20 per cent potential upside. The brokerage said the defence manufacturer is positioned to benefit from the rising importance of air defence and electronic warfare, supported by its order pipeline, research and development capabilities, and infrastructure.
On Tuesday, the stock was trading 2.5 per cent higher at Rs 1,706.60 on BSE.
According to Antique, the investment case is driven by an addressable opportunity of about Rs 25,000 crore across key programmes, with management targeting Rs 8,000-10,000 crore of order wins over the next five years. It also pointed to Astra Microwave's order book of about Rs 4,300 crore, with more than 90 per cent BTS orders, giving revenue visibility of around 3.5 years, and to the planned rise in the share of complete systems in revenue from 15 per cent to 50 per cent over the next three to five years, which it said could support margin stability and expansion in return on capital employed.
Antique said Astra Microwave has more than 30 years of domain experience and over 635 research and development personnel. It added that the company has six facilities, in-house testing capabilities, and expertise across RF and microwave, digital electronics, and MMIC technologies. Its capabilities include developing GaN/GaAs MMICs up to 40GHz, Active Antenna Array Units for Uttam AESA, and electronic warfare and radar systems, which the brokerage said strengthen its position in next-generation defence programmes.
The brokerage said Astra Microwave has a presence across radar electronics, electronic warfare, satellite communication and weather surveillance technologies, and is likely to participate in high-value programmes including QR-SAM, Virupaksha and software-defined radios. It noted that the company recently announced an Rs 2,200 crore billion order for the delivery of 122 Active Antenna Array Units and 121 interface frames for Uttam Radar.
After this order, Antique said, the company's order book stood at about Rs 4,350 crore, up 130 per cent year-on-year, and had doubled following the Uttam Radar AAAU win. It added that more than 90 per cent of the order book comprises BTS orders, implying higher value addition and margins, and revenue visibility of nearly three years.
Antique also listed other potential opportunities, including QR-SAM orders of INR 7.0-8.0 billion, the Su-30 Virupaksha programme worth INR 30 billion, and Doppler Radar for Mission Mausam. It said Astra Rafael Comsys, the company's joint venture, secured order inflows of about INR 4.0 billion in FY26 and won a further order of about INR 2.5 billion in the first quarter of FY27 for the delivery of software-defined radios to Hindustan Aeronautics Limited.
On restructuring, the brokerage said the proposed demerger of the Defence and Aerospace business from the Space, Meteorology and Hydrology business could sharpen strategic focus, improve capital allocation and help investors assess the growth potential of each business separately.
Antique said it expects profit after tax to grow at a CAGR of 35 per cent over FY26-29E, supported by order inflows and execution of the order book. It added that Astra Microwave's push to move from a subsystems player to a systems developer, with large systems targeted to contribute up to 50 per cent of revenue over the next three to five years from 15 per cent at present, is expected to support revenue, margins and capital efficiency.