- Goldman Sachs backs India’s private defence sector amid Budget 2026 optimism
- Six private-sector defence stocks given buy ratings by Goldman Sachs
- US-India trade deal and EU-India FTA to boost global supply chain integration
Although the Budget 2026 speech left very little to be desired for most defence companies in India, Goldman Sachs appears to have doubled down on the sector. In its latest note, the global brokerage firm has identified a key trend prevailing in the defence sector - a pivot towards private-sector players, as part of the nation's push for 'Atmanirbharta'.
Keeping that in mind, Goldman Sachs has reiterated 'buy' ratings on six key stocks in the private-sector defence space, with all the companies poised to benefit from a prevailing domestic opportunity that could be worth around $120 billion.
Goldman Sachs has based its bullish assumption on these companies primarily through three tailwinds: An 18% year-on-year growth in capital procurement for the FY27 defence budget, a landmark US-India trade deal and the proposed EU-India Free Trade Agreement. These factors are likely to integrate Indian firms more deeply into global supply chains, as OEMs look for the China+1 alternatives.
Goldman Sachs' Stock Picks
Solar Industries: Reclassified as a pure defence play due to its extensive work in ammunition and drones.
Azad Engineering: Recognised as a critical player in complex component machining for global aerospace OEMs.
Read More: China+1 Tailwind Puts Azad Engineering In Sweet Spot, Says Goldman Sachs
PTC Industries: Emerging as a vital supplier of processed materials, particularly aerospace-grade titanium.
Data Patterns: Singled out for its leadership in radar electronics.
Astra Microwave & Bharat Electronics (BEL): Both remain top picks as lead integrators for advanced subsystems and electronics.
Photo Credit: Goldman Sachs
The Road Ahead
Goldman Sachs believes there is room to be cautious regarding the development of high-thrust engines, despite the draft Defence Acquisition Procedure (DAP) 2026 looking to slash procurement timelines.
The proposed co-development of a110-120 kN high-thrust turbofan with SAFRAN for the AMCA program is viewed as a complex, long-term challenge that may require up to $20 billion in investment.
Despite these risks, the robust order books of engine suppliers, stretching to 2035, provide a multi-year growth runway for Indian component players.
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