BEL, Data Patterns, Solar Industries: Mayuresh Joshi's 3 defence stock bets

India’s defence investment story is increasingly moving beyond the traditional PSU trade, with shipbuilders and select private-sector names emerging as the more compelling long-term bets. That is the core message from Mayuresh Joshi, Head of Equity Research at William O’Neil India, who argued that investors need to judge the sector through a structural lens rather than through volatile quarterly numbers.

A multi-year defence thesis

Joshi said the market’s attention has clearly shifted “from PSU defense plays to the private sector,” reflecting a broader hunt for earnings visibility and scalable order pipelines. In his view, defence remains “a multi-year play,” even if near-term numbers periodically unsettle investors.

That distinction matters. Defence manufacturing businesses, especially those tied to large projects, often face uneven revenue recognition, milestone-based execution and elongated payment cycles. As a result, quarterly earnings can look patchy even when the underlying opportunity remains intact.

Why shipbuilders stand out

Within the sector, Joshi singled out shipbuilders as “structurally a very good long-term story.” The comment is significant because shipbuilding sits at the intersection of strategic spending, domestic manufacturing capability and long-gestation order books, making it less of a tactical trade and more of a patience-driven investment theme.

He also cautioned that investors should expect intermittent disappointments. “A quarter in every analysed year… is going to disappoint,” he said, citing execution risks, perceived misses and working-capital delays linked to payments from authorities. For the market, that means stock reactions may remain sharp around earnings, even when the broader business trajectory is healthy.

BEL anchors large-cap defence

Among large-cap names, Bharat Electronics Ltd remains Joshi’s preferred play. “BEL strong order book should continue doing well,” he said, underlining the importance of backlog strength in a sector where revenue conversion depends heavily on project flow and government-linked procurement cycles.

The emphasis on order books also fits with the wider market mood outlined in the broader discussion, where earnings durability rather than headline noise is driving stock selection. In that framework, companies with visible execution pipelines are likely to command investor attention.

Private mid-caps gain traction

In the mid-cap universe, Joshi highlighted Solar Industries and Data Patterns as names that “should continue doing well.” The preference reinforced a larger trend visible across the market: investors are increasingly willing to back niche, earnings-led mid-cap stories in sectors such as defence, aerospace and industrial manufacturing.

That shift is also consistent with the broader portfolio bias discussed in the conversation, where mid- and small-cap exposure is being driven by earnings concentration in emerging growth sectors. For defence investors, the takeaway is clear: short-term volatility may persist, but the sector’s structural case remains firmly in place.