Defence stocks to buy: BEL, HAL, Data Patterns, ZEN Tech are top analyst picks

Stock analysts remained largely optimistic about select defence sector stocks, citing improved order flows and fresh approvals by the Defence Acquisition Council (DAC) following Operation Sindoor. The sector is benefiting from strong structural tailwinds, including heightened global recognition of India’s defence capabilities amid recent geopolitical shifts, rising international demand for defence exports, increased NATO spending, Europe’s rearmament drive, and the Indian government’s continued push for indigenisation.

As a result, brokerages have maintained a broadly positive outlook on the defence sector.

“We list Solar Industries, Astra Microwave and Azad Engineering as our top picks in the private space. Among DPSUs, we prefer Hindustan Aeronautics (HAL), Bharat Electronics (BEL) and Midhani,” ICICI Securities said on Monday.

The brokerage said many companies under its coverage have guided for over 15 per cent revenue growth in FY26. But some companies like BDL, Solar Industries and Azad Engineering have guided for even higher growth rate of 25-30 per cent. BEL is expecting order inflows of Rs 20,000-25,000 crore (ex- QRSAM order) for FY26. HAL is projecting inflows of over Rs 1 lakh crore, which includes Su-30 upgrade, Tejas Mk-2 and RoH orders.

BDL is expecting orders of Rs 5,000 crore across its product categories, GRSE is expecting NG corvette order of Rs 25,000 crore apart from other vessels orders. Midhani sees orders of Rs 1,200-1,300 crore, Zen Technologies Rs 800 crore in H1FY26 and Astra Rs 1,300-1,400 crore.

Ashika Institutional Equities said key beneficiaries of recent approvals include Bharat Dynamics (missile manufacturer), BEL (radar systems and electronic warfare), Cochin Shipyard (key player in underwater & autonomous vessel orders), Mazagon Dock Shipbuilders (Key player in destroyers & mine counter vessels), and Garden Reach Shipbuilders & Engineers (chances of gains from patrol vessel contracts), said . Other potential beneficiaries are Paras Defence & Space Technologies, Data Patterns, and Astra Microwave, it said.

This brokerage has ‘Buy’ rating on Data Patterns.

“We maintain Buy on Zen Technologies with a target of Rs 2,290, on 40 times FY27E P/E. Also, Astra Microwave Products and MTAR TECH are witnessing growing orderbooks and a rise in products and capabilities. Opening up of export opportunities after the recent conflict could be a rerating catalyst for Zen Tech,” Elara Secruities said.