Defence stocks to buy: HAL, Midhani, BEL, Solar Industries, PTC among ICICI's top picks
ICICI Securities is structurally positive outlook for the Indian defence sector, underpinned by sustained government policy support, rising capital allocation and multi-year visibility on orders.
- Mar 6, 2026,
- Updated Mar 6, 2026 11:20 AM IST
Domestic brokerage firm ICICI Securities maintains its structurally positive outlook for the Indian defence sector, underpinned by sustained government policy support, rising capital allocation and multi-year visibility on orders. Ministry of Defence (MoD) is targeting a capital outlay of Rs 3 lakh crore by CY29, implying a double-digit CAGR.
"The recent Israel-US-Iran war has once again emphasized on the military spends for security thus, we expect GCC countries to augment defence budgets sharply, providing additional revenue streams to Indian players via exports," it said. The brokerage believes that major impetus would be observed in multiple segments, with companies exposed to these segments potentially performing relatively better.
India’s Budget for fiscal year 2027 has allocated Rs 7.85 lakh to the MoD, marking a 15 per cent increase year-on-year. The capital outlay for new defence procurements has increased by 22 per cent year-on-year, underlining the government’s commitment to domestic capability and modernisation, the brokerage firm notes.
The period saw Tata-Airbus inaugurate the H125 helicopter’s final assembly line in Karnataka, which is projected to bolster local manufacturing and technology transfer within India’s aerospace sector.
ICICI Securities said that the successful delivery by Sagar Defence Engineering of two unmanned weaponised fast interceptor craft to the Indian Navy, the first of 12 ordered. The Odisha government has approved Rs 17,399 billion for Kalyani Group to establish an integrated auto, aero, and defence manufacturing complex over 1,100 acres, expected to drive significant regional industrial growth.
ICICI Securities emphasises the significance of collaborations such as BEL and Safran Electronics for local production of HAMMER air-to-surface weapons and the MoU between Embraer and Hindalco to explore aerospace-grade aluminium manufacturing in India. Bharat Forge’s transition into producing complete ready-to-fire ammunition and the establishment of a final assembly line.
The Indian Air Force has issued a new request for information for the Medium Transport Aircraft programme, raising its payload ceiling to 30 tonnes. GRSE has laid the keel for the third multi-purpose vessel for a German client, while Tychon Global Systems is setting up a 30/40mm ammunition manufacturing facility with an investment of INR 5 billion. The Indian Navy has inducted the indigenous anti-submarine warfare vessel, INS Androth.
ICICI Securities has picked Hindustan Aeronautics (Target Price: Rs 5,300) as its top picks from the PSU defence space, while Solar Industries (Target Price: Rs 17,200) and PTC Industries (Target Price: Rs 21,000) are its top picks from private defence space. All three stocks have a 'buy' rating for them.
Among other stocks, ICICI Securities has given a 'buy' rating for Astra Microwave (Target Price: Rs 1,200), Azad Engineering (Target Price: Rs 1,900), Midhani (Target Price: Rs 445). It had an 'add' rating on Bharat Electronics (Target Price: Rs 480) and Zen Technologies (Target Price: Rs 1,520). It has given a 'reduce' rating to Bharat Dynamics with a target price of Rs 1,400 on it.
Domestic brokerage firm ICICI Securities maintains its structurally positive outlook for the Indian defence sector, underpinned by sustained government policy support, rising capital allocation and multi-year visibility on orders. Ministry of Defence (MoD) is targeting a capital outlay of Rs 3 lakh crore by CY29, implying a double-digit CAGR.
"The recent Israel-US-Iran war has once again emphasized on the military spends for security thus, we expect GCC countries to augment defence budgets sharply, providing additional revenue streams to Indian players via exports," it said. The brokerage believes that major impetus would be observed in multiple segments, with companies exposed to these segments potentially performing relatively better.
India’s Budget for fiscal year 2027 has allocated Rs 7.85 lakh to the MoD, marking a 15 per cent increase year-on-year. The capital outlay for new defence procurements has increased by 22 per cent year-on-year, underlining the government’s commitment to domestic capability and modernisation, the brokerage firm notes.
The period saw Tata-Airbus inaugurate the H125 helicopter’s final assembly line in Karnataka, which is projected to bolster local manufacturing and technology transfer within India’s aerospace sector.
ICICI Securities said that the successful delivery by Sagar Defence Engineering of two unmanned weaponised fast interceptor craft to the Indian Navy, the first of 12 ordered. The Odisha government has approved Rs 17,399 billion for Kalyani Group to establish an integrated auto, aero, and defence manufacturing complex over 1,100 acres, expected to drive significant regional industrial growth.
ICICI Securities emphasises the significance of collaborations such as BEL and Safran Electronics for local production of HAMMER air-to-surface weapons and the MoU between Embraer and Hindalco to explore aerospace-grade aluminium manufacturing in India. Bharat Forge’s transition into producing complete ready-to-fire ammunition and the establishment of a final assembly line.
The Indian Air Force has issued a new request for information for the Medium Transport Aircraft programme, raising its payload ceiling to 30 tonnes. GRSE has laid the keel for the third multi-purpose vessel for a German client, while Tychon Global Systems is setting up a 30/40mm ammunition manufacturing facility with an investment of INR 5 billion. The Indian Navy has inducted the indigenous anti-submarine warfare vessel, INS Androth.
ICICI Securities has picked Hindustan Aeronautics (Target Price: Rs 5,300) as its top picks from the PSU defence space, while Solar Industries (Target Price: Rs 17,200) and PTC Industries (Target Price: Rs 21,000) are its top picks from private defence space. All three stocks have a 'buy' rating for them.
Among other stocks, ICICI Securities has given a 'buy' rating for Astra Microwave (Target Price: Rs 1,200), Azad Engineering (Target Price: Rs 1,900), Midhani (Target Price: Rs 445). It had an 'add' rating on Bharat Electronics (Target Price: Rs 480) and Zen Technologies (Target Price: Rs 1,520). It has given a 'reduce' rating to Bharat Dynamics with a target price of Rs 1,400 on it.