Antique Stock Broking remains bullish on India’s defence sector, buoyed by a robust order pipeline, growing self-reliance, and increased geopolitical risks.
With India targeting defence capital outlay worth Rs 16 lakh crore through domestic procurement by 2030, the brokerage sees meaningful upside in a select set of defence-focused firms, maintaining a ‘buy’ stance on Hindustan Aeronautics Ltd., Bharat Electronics Ltd., Mazagon Dock Shipbuilders Ltd., and PTC Industries Ltd.
The pricing environment within the defence sector has stabilised, contributing to projected stable profitability for manufacturers. Companies are poised to benefit from this growth trend, supported by strong earnings forecasts and strategic contracts in the pipeline.
Hindustan Aeronautics (Rating: Buy, Target Price: Rs 6,545)
HAL is set to be a prime beneficiary of India’s push to modernise its air force, particularly through the induction of new-generation fighter jets, noted the brokerage. With the Indian Air Force aiming to expand from 32 to 42 squadrons, there’s a requirement for over 300 new aircraft, offering a multi-year opportunity for HAL through platforms like the Tejas Mk-1A, Mk-II and AMCA.
Supply chain issues that plagued production due to delays in GE’s engine deliveries are now easing, with the first engine delivered in first quarter of this fiscal and 12 more expected during the year. Execution of the 83-aircraft Tejas Mk-1A order is expected to accelerate, with further orders of 97 aircraft possible.
Bharat Electronics (Rating: Buy, Target Price: Rs 422)
BEL is set to benefit from increasing electronics content in modern warfare systems. It is expected to win a Rs 30,000 crore QRSAM order in this financial year, alongside Rs 27,000 crore in other orders, potentially exceeding Rs 57,000 crore in inflows. Capex of Rs 700–800 crore annually is planned to boost capacity, including new facilities for electro-optics, RF seekers, and electronic warfare systems.
Mazagon Dock Shipbuilders (Rating: Buy, Target Price: Rs 3,858)
India’s only submarine builder, is likely to receive order of three additional Scorpene submarines, potentially doubling its order book. Further upside is expected from the P75I and P17B orders.
With a partnership with Germany’s TKMS for P75I involving tech transfer, Mazagon Dock may also benefit from future outsourcing of submarine production. Antique sees the order book swelling to Rs 1.5 lakh crore by the next fiscal, offering long-term visibility.
PTC Industries (Rating: Buy, Target Price: Rs 19,639)
PTC Industries is building one of the world’s largest integrated titanium and superalloy manufacturing complexes. Once fully operational, the Lucknow-based facility could drive revenue growth of 10–20 times over the next five years, reaching up to Rs 7,000 crore by fiscal 2030, with casting segment Ebitda margins exceeding 50%.
With robust forward integration and applications across global aerospace and defence, PTC is seen as a high-margin, long-term structural growth story, said the brokerage.
. Read more on Markets by NDTV Profit.HAL is gearing up for a substantial increase in aircraft production, while BEL is adapting to the evolving market by positioning itself as a systems integrator in defence electronics. Read MoreMarkets, Business, Notifications
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