Bharat Electronics, Bharat Dynamics shares: Why ICICI Securities is bullish on these 2 defence stocks

Shares of defence companies like Bharat Electronics Limited (BEL), Bharat Dynamics Limited (BDL), Cochin Shipyard, Goa Shipyard and Data Patterns are in focus after the Ministry of Defence signed multiple contracts worth over Rs 35,000 crore with state-owned and private companies. 

According to ICICI Securities, most of these orders are under the Indian-IDMM category, in line with the government’s focus on indigenisation and have consequential benefits for downstream companies in radars, instrumentation and surveillance systems such as BEL and Data Patterns.

The brokerage firm believes that the primary beneficiary (among coverage companies) is likely to be BEL with direct orders of Rs 11,830 crore and consequential benefits from Akash 3rd and 4th regiments and Next Generation Offshore Patrol Vessels (NGOPV) for Goa Shipyard/GRSE.

It expects BEL to record Rs 20,000 crore of order inflow for FY23. With the awarding of Akash's 3rd and 4th regiment orders, it believes that a key market expectation for BDL has also been met. In the case of Shipyards, it sees the awarding of NGOPV as a respite for both GRSE and Goa Shipyard (also benefitting its HOLDCO- MDL) as delivery is expected from Sep,‘2026. 

ICICI Securities has maintained a 'Buy' rating on BEL with a target price of Rs 125 and it is also its top pick in the space. "Taking cognisance of better earnings outlook for BDL, we revise its target price to Rs 1,175 on DCF valuation. We revise BDL’s recommendation to BUY (earlier Add). The companies Cochin Shipyard, Goa Shipyard and Data Patterns are not rated," it added.
 

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