India’s defence manufacturing sector is showing strong momentum, and top brokerage firm Choice Institutional Equities recommends using any short-term market dips to accumulate quality stocks like Hindustan Aeronautics Ltd (HAL) and Bharat Electronics Ltd (BEL).
India’s Defence Sector Grows with Policy Push and Global Integration
India’s defence industry is rapidly evolving, supported by:
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Robust government policies
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Rising execution capabilities
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Strategic global partnerships
Choice Institutional Equities believes this trend will continue during the Q1FY26 earnings season, with major defence players expected to report solid performance.
“We remain structurally positive on India’s defence ecosystem,” the brokerage stated, citing strong policy support and consistent order inflows.
HAL: Strong Order Execution to Drive Sales Growth
Hindustan Aeronautics Ltd (HAL) is projected to show:
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23.9% year-on-year growth in revenue
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Higher execution of large defence orders, especially in fighter jets and helicopters
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EBITDA margin expected to rise 50 basis points to 23.3%, thanks to better fixed cost absorption
However, net profit may remain flat due to increased depreciation and tax expenses.
BEL: Stable Margins Despite Sales Dip
Bharat Electronics Ltd (BEL) is forecasted to:
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Report a 19% drop in sales, due to a strong base and seasonal fluctuations
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Maintain EBITDA margin at 22.3%, supported by a better product mix and cost controls
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See a 17% decline in net profit, aligning with the lower sales
Despite these figures, BEL remains a solid long-term bet.
India’s Defence Exports Skyrocket
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Defence exports surged 10x in the past decade, reaching ₹21,000 crore in FY25
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The Indian government targets ₹50,000 crore exports by 2029
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Indian firms are increasingly becoming part of global supply chains, working closely with international OEMs
Choice: Accumulate on Dips, Focus on Fundamentals
Choice Institutional Equities views any short-term volatility in defence stocks as a buying opportunity. HAL and BEL, with their strategic roles, strong order books, and long-term visibility, are considered top defence stock picks in India.
“These companies are no longer just domestic players. They are now becoming strategic global partners, and their scale makes them key beneficiaries of India’s long-term defence growth,” the report said.
✅ Conclusion
India’s defence sector is not only growing—it’s transforming. Stocks like HAL and BEL are at the heart of this shift. For long-term investors, now is the time to accumulate quality defence stocks while valuations are still attractive.
