HAL, BEL, Mazagon Dock shares: Top 3 defence picks; targets for BDL, Zen, PTC Industries

Antique Stock Broking, in its latest note on the defence sector, said defence companies have strong growth opportunities in the foreseeable future, citing project approvals worth Rs 6.7 lakh crore in FY26. Hindustan Aeronautics Ltd (HAL), Bharat Electronics Ltd (BEL) and Mazagon Dock Shipbuilders Ltd are its top three stock picks in the sector. The brokerage also has a ‘Buy’ call on Zen Technologies Ltd, Solar Industries India Ltd, PTC Industries Ltd and Bharat Dynamics Ltd, among others.

Antique Stock Broking said a delay in finalisation of large programmes such as P-75I submarines, QRSAMs, and the Next Generation Corvette resulted in a 17 per cent YoY decline in order inflows for listed defence PSUs in FY26. It, however, believes the ordering momentum should regain traction in the near-term the contractual negotiations for the orders have been largely completed, paving the way for final clearance from the CCS. 

"We believe that ordering pipeline for FY26-27 remains robust and reiterate BUY on HAL, MDL, and BEL," Antique said.

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Near-term defence orders 

Antique said it sees the placement of several marquee defence orders, including the P75I submarine program estimated at Rs 90,000 crore, the QRSAM system at Rs 30,000 crore, and the Next-Generation Corvette (NGC) program at Rs 33,000 crore. These orders are expected to be awarded to MDL, BEL, and Garden Reach (GRSE), respectively. 

In addition, the execution of these programs is expected to create meaningful opportunities for ancillary defence companies, Antique said while expecting BDL to benefit from missile supplies of Rs 10,000-12,000 crore for the QRSAM program, while BEL is expected to secure orders for Combat Management Systems (CMS) for both the NGC and P75I programs. 

"The award of these large contracts is expected to significantly strengthen the order books of the prime contractors as well as key subsystem suppliers, enhancing revenue visibility over the medium term," Antique said. Antique suggested a target of Rs 6,026 for HAL, Rs 532 for BEL, Rs 21,408 for Solar Industries, Rs 3,275 for Mazagon Dock, Rs 1,597 for BDL, Rs 24,415 for PTC Industries and Rs 2,000 for Zen Technologies.

Global demand for defence 

Antique said heightened geopolitical tensions and replenishment cycles across Europe, Asia and the Middle East have created a multiyear demand cycle for missiles, aircrafts, anti-drone systems, ammunition, rockets and high-energy materials. The industry indicates a sustained demand visibility for the next 5-7 years, it said.