BEL, HAL, BDL, Mazagon Dock, Solar, Astra, Paras, BEML: 9 defence stocks to buy

Nirmal Bang Institutional Equities, in its latest note on the defence sector, maintained ‘Buy’ ratings on at least nine defence stocks, citing a strong outlook for the second half of the ongoing financial year. The list included Bharat Electronics (BEL), Hindustan Aeronautics Ltd (HAL), Bharat Dynamics Ltd (BDL), Mazagon Dock, BEML and Paras Defence. It also reiterated ‘Buy’ on Astra Microwave, Data Patterns and Solar Industries.

The brokerage viewed H2FY26 as strong to healthy for the Indian defence industry.

“On aggregate, the sector was well positioned to deliver meaningful revenue growth, supported by a large order book, favourable government policy, and rising localisation. Ebitda and PAT across many mid-to-large firms should trend upwards, assuming working capital remains under control and execution stays on schedule,” it said.

It cautioned, however, that structural complexities in defence—such as long delivery cycles, certification and trial delays, and payment schedules—would likely result in uneven performance across companies. Firms with strong balance sheets, diversified order books and tight supply-chain control were expected to fare better than smaller players more exposed to receivables or sub-component manufacturing.

Nirmal Bang suggested price targets of Rs 470 for BEL, Rs 1,774 for BDL and Rs 6,151 for HAL. It viewed Mazagon Dock at Rs 3,515, BEML at Rs 2,610, Astra Microwave at Rs 1,234 and Data Patterns at Rs 3,653. Targets for Paras Defence and Solar Industries were pegged at Rs 979 and Rs 17,430, respectively.

It said estimating revenue, Ebitda and PAT for defence companies begins with analysing confirmed order books and understanding execution cycles—typically 18–36 months depending on system complexity. The process also involves mapping expected deliveries to financial years based on past execution patterns, management guidance and capacity constraints.

The brokerage cited continued government spending and capital outlays under modernisation programmes, noting that early utilisation of 50 per cent of the FY26 capital budget by mid-year already indicated strong momentum.

It added that rising localisation and the ‘Make in India’ push are reducing import dependence, improving margins and strengthening domestic supply-chain resilience. Increased participation from private players, start-ups and MSMEs across land, naval, aero and electronics segments, coupled with growing export potential as Indian manufacturing quality improves, are among the key drivers it highlighted.