BEL, HAL, BDL, Astra Microwave: 4 defence stocks to buy amid Iran war; target prices

MOFSL on Tuesday retained its positive stance on the defence sector, even as it flagged potential supply chain constraints, particularly related to specialised components and imported subsystems, which could affect execution timelines of certain defence platforms in the near term. The domestic brokerage said the ongoing conflict in West Asia is likely to drive higher global defence spending as nations prioritise security and military preparedness.

 "In this environment, India’s defense sector is well positioned to benefit from both rising domestic procurement and increasing export opportunities, supported by the government’s push for indigenization and a growing reputation in global arms markets," it said.

MOFSL is positive on  Bharat Electronics Ltd (BEL), Hindustan Aeronautics Ltd (HAL),  Bharat Dynamics Ltd (BDL), Astra Microwave Products Ltd and suggested 'Neutral' rating on Zen Technologies Ltd. The domestic brokerage suggested a target of Rs 520 on BEL, Rs 5,500 on HAL, Rs 1,800 on BDL and Rs 1,150 on Astra Microwave. MOFSL suggested a target of Rs 1,400 on Zen Tech.

West Asia accounts for 26 per cent of total global arms imports and this can increase further, thereby opening up opportunities for domestic defense companies to capture this market. Along with this, the earlier NATO directive to member nations to increase defense capex allocation and higher budgetary allocation for defense by Indian government bode well for increasing the TAM for domestic defense companies, MOFSL said.

"We expect companies like Bharat Electronics, Bharat Dynamics, Solar Industries, Astra Microwave and Zen Tech to benefit from a higher TAM," it said.

BEL has highlighted near-term opportunities, including LCA Mk-1A systems (Rs 2,400 crore), Shatrughat EW (Rs 3,000 crore), next-gen corvettes (Rs 2,000-3,000 crore in FY26 and Rs 10,000-12,000 by 1HFY27), additional programs of Rs 2,000 crore, and expected QRSAM inflows of Rs 30,000 crore.

HAL, MOFSL said, is expected to begin deliveries of Tejas Mk-1A and has secured orders such as Dornier-228, Dhruv-NG, and ALH Mk-III. BDL is targeting Rs 20,000 crore of orders over the next 18 months from an Rs 50,000 crore pipeline, supported by advanced trials of Akash-NG and other missile systems.

"Astra Microwave remains well-positioned for QRSAM and EW-linked electronics opportunities (Rs 25,000 long-term). ZEN expects an Rs 60 crore simulator order to lift its book from Rs 1,430 crore to Rs 2,000 crore, largely executable over 18 months," MOFSL said.

GRSE, it noted, has emerged as L1 for next-generation corvettes (Rs 33,000 crore) and sees progress on P-17 Bravo (Rs 70,000 crore), landing platform dock (Rs 35,000 crore), and mine counter-measure vessels (Rs 32,000 crore). SOIL reported a strong defense order book of Rs 18,000 crore, supported by Pinaka and ammunition supplies from 4QFY26.