Defence Stocks To Buy: HAL, BEL, Bharat Dynamics Poised For Gains With Strong Upside Projects Motial Oswal

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Motilal Oswal Report

Motilal Oswal has reiterated its Buy stance on leading defense PSUs—Bharat Electronics Ltd., Hindustan Aeronautics Ltd., and Bharat Dynamics Ltd. —citing strong order visibility, export opportunities, and margin resilience.

The brokerage maintains target prices of Rs 500 for BEL, Rs 5,800 for HAL, and Rs 2,000 for BDL, implying robust upside potential over the next 12 months.

Long-term visibility intact

The brokerage expects the defense sector to continue to benefit from-

1. the expected increase in fund allocation in the upcoming budget, supporting continued increase in TAM;

2. AoNs worth Rs 7 trillion approved during FY24-10MFY26, supporting incremental order inflows over next few years;

3. incremental spending on defense across NATO countries, thereby opening opportunities for defense exports; and

4. additional momentum from the Rs 400 billion emergency procurement program under the ‘Fast Track Procedure’ category, which mandates significantly shorter acquisition timelines.

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