HAL, BEL, BDL, Mazagon Dock, Paras Defence, Astra Micro, Data Patterns: Share price targets
Ashika Institutional Equities said defence is no longer merely a government expenditure but a strategic national priority as it suggested 'Buy' on BEL, BEML, HAL and Solar Industries.
- Aug 26, 2026,
- Updated Aug 26, 2026 12:20 PM IST
Defence stocks to buy: Ashika Institutional Equities on Wednesday has initiated coverage on nine defence stocks namely Hindustan Aeronautics (HAL), Bharat Electronics (BEL), BEML, Mazagon Dock Shipbuilders (MDL), Bharat Dynamics (BDL), Data Patterns, Astra Microwave Products, Paras Defence and Space Technologies, and Solar Industries.
The brokerage said defence is no longer merely a government expenditure but a strategic national priority as it suggested 'Buy' on BEL, BEML, HAL and Solar Industries with targets of Rs 506, Rs 2,590, Rs 6,069 and Rs 23,543, respectively. The targets implied 20-35 per cent potential upside.
Ashika Institutional, on the other hand, suggested 'Hold' on Astra Microwave, Data Patterns, Paras Defence, Bharat Dynamics, Mazagon Dock, with targets of Rs 1,728, Rs 4,893, Rs 1,495, Rs 1,360 and Rs 2,875, respectively, hinting at limited upside potential.
Ashika said India is undergoing a once-in-a-generation transformation from being one of the world's largest defence importers to an emerging global defence manufacturing hub.
"Government initiatives such as Aatmanirbhar Bharat, higher defence budgets (from 1.9 per cent of GDP in FY25 to 2.5 per cent of GDP expected in FY30), indigenization policies, increased R&D spending (CAGR of 10 per cent during FY25-FY30; 16 per cent of total defence production in India), and greater private sector participation (from 20 per cent of total Indian defence production value in FY25 to 30 per cent in FY30) are creating a vertically integrated defence ecosystem," it said.
Ashika said domestic companies are ‘moving up the value chain’ from component suppliers to technology developers and systems integrators while defence exports continue to accelerate.
"India’s defence exports scaled at a 40 per cent CAGR over FY14–FY26 to reach Rs 38,400 crore. While the government’s target is set at Rs 50,000 crore by FY29 (9 per cent CAGR), we project a steeper trajectory, expecting defence exports to cross the Rs 75,000 crore (CAGR of 18 per cent) milestone by FY30," the domestic brokerage said.
Ashika said it is factoring in revenue, Ebitda and profit growth of 20 per cent, 22 per cent and 20 per cent across its coverage universe over FY26-FY28E, compounded annually.
It said price-to-book is the most appropriate valuation framework for defence companies, given their long-duration order books, multi-year programme visibility and relatively predictable earnings conversion. It also captures the value embedded in proprietary technology/IP, qualification barriers, strategic customer relationships, platform participation and execution capabilities.
For BEML, however, it said a single consolidated multiple does not adequately capture the distinct economics of its Rail & Metro, Defence & Aerospace, and Mining & Construction businesses and, thus, used assigning segment-specific EV/Ebitda multiples to reflect differences in growth trajectories, margin profiles, capital intensity, competitive positioning and earnings visibility across its three business verticals.
Defence stocks to buy: Ashika Institutional Equities on Wednesday has initiated coverage on nine defence stocks namely Hindustan Aeronautics (HAL), Bharat Electronics (BEL), BEML, Mazagon Dock Shipbuilders (MDL), Bharat Dynamics (BDL), Data Patterns, Astra Microwave Products, Paras Defence and Space Technologies, and Solar Industries.
The brokerage said defence is no longer merely a government expenditure but a strategic national priority as it suggested 'Buy' on BEL, BEML, HAL and Solar Industries with targets of Rs 506, Rs 2,590, Rs 6,069 and Rs 23,543, respectively. The targets implied 20-35 per cent potential upside.
Ashika Institutional, on the other hand, suggested 'Hold' on Astra Microwave, Data Patterns, Paras Defence, Bharat Dynamics, Mazagon Dock, with targets of Rs 1,728, Rs 4,893, Rs 1,495, Rs 1,360 and Rs 2,875, respectively, hinting at limited upside potential.
Ashika said India is undergoing a once-in-a-generation transformation from being one of the world's largest defence importers to an emerging global defence manufacturing hub.
"Government initiatives such as Aatmanirbhar Bharat, higher defence budgets (from 1.9 per cent of GDP in FY25 to 2.5 per cent of GDP expected in FY30), indigenization policies, increased R&D spending (CAGR of 10 per cent during FY25-FY30; 16 per cent of total defence production in India), and greater private sector participation (from 20 per cent of total Indian defence production value in FY25 to 30 per cent in FY30) are creating a vertically integrated defence ecosystem," it said.
Ashika said domestic companies are ‘moving up the value chain’ from component suppliers to technology developers and systems integrators while defence exports continue to accelerate.
"India’s defence exports scaled at a 40 per cent CAGR over FY14–FY26 to reach Rs 38,400 crore. While the government’s target is set at Rs 50,000 crore by FY29 (9 per cent CAGR), we project a steeper trajectory, expecting defence exports to cross the Rs 75,000 crore (CAGR of 18 per cent) milestone by FY30," the domestic brokerage said.
Ashika said it is factoring in revenue, Ebitda and profit growth of 20 per cent, 22 per cent and 20 per cent across its coverage universe over FY26-FY28E, compounded annually.
It said price-to-book is the most appropriate valuation framework for defence companies, given their long-duration order books, multi-year programme visibility and relatively predictable earnings conversion. It also captures the value embedded in proprietary technology/IP, qualification barriers, strategic customer relationships, platform participation and execution capabilities.
For BEML, however, it said a single consolidated multiple does not adequately capture the distinct economics of its Rail & Metro, Defence & Aerospace, and Mining & Construction businesses and, thus, used assigning segment-specific EV/Ebitda multiples to reflect differences in growth trajectories, margin profiles, capital intensity, competitive positioning and earnings visibility across its three business verticals.