Defence stocks: 10 broker targets after Rs 79,000cr DAC

Why defence stocks are back in focus

India’s listed defence pack saw renewed attention after the Defence Acquisition Council (DAC) cleared capital acquisition proposals worth Rs 79,000 crore. Domestic brokerages argued that the scale of approvals improves visibility for the defence procurement pipeline and could support order inflows for both public sector and select private players.

Motilal Oswal Financial Services (MOFSL) said the approvals have pushed FY26 year-to-date defence capital approvals to Rs 330,000 crore, versus the annual defence capital outlay of Rs 180,000 crore. In this backdrop, multiple houses reiterated or issued targets across large PSUs such as Bharat Electronics (BEL) and Hindustan Aeronautics (HAL), along with mid-cap names such as Astra Microwave Products.

What brokerages are linking to the DAC approvals

MOFSL described the clearances as broad-based and said this breadth is expected to de-risk future order inflows for public sector defence firms and select private players over the next two to four years. ICICI Securities also flagged the theme of sustained defence capital spending, noting that such support implies a sustained double-digit compounded annual growth in defence capex.

The discussion has not been limited to one brokerage. Alongside MOFSL and ICICI Securities, other target-price references in the provided data include ICICI Direct, Geojit and Nirmal Bang, while InCred Equities framed the opportunity around a longer-term modernisation push.

Key target prices at a glance (10 stocks)

The following table compiles target prices explicitly mentioned in the provided text. Where multiple targets appear, the range is shown.

BEL: valuation snapshot and targets

For BEL, one note in the provided text cited valuation levels of 41.5x / 35.4x on FY27E/FY28E EPS. MOFSL reiterated a BUY with an unchanged target price of Rs 520, stating that the target was based on 45x two-year forward earnings.

A separate MOFSL target mentioned for BEL was Rs 500, alongside a stated current market price (CMP) of Rs 393 and an implied upside of 27.2%. Additional targets cited included Rs 470 (Nirmal Bang) and Rs 459 with an ‘Add’ rating (InCred Equities).

HAL: top pick references across brokerages

ICICI Securities picked HAL (Target Price: Rs 5,300) as its top pick from the PSU defence space in the referenced list. MOFSL also published targets for HAL, including Rs 5,500 in one section and Rs 5,800 in another, with the latter paired with a CMP of Rs 4,377 and an implied upside of 32.5%.

Nirmal Bang’s targets referenced Rs 6,151 for HAL, while InCred Equities cited a higher target price of Rs 6,325 and assigned an ‘Add’ rating. Across these notes, the central argument was that HAL is positioned to benefit from an expanding procurement pipeline after large approvals.

BDL: targets anchored to forward earnings multiples

For Bharat Dynamics (BDL), one brokerage note cited a reiterated BUY with an unchanged price target of Rs 1,800, based on 42x two-year forward earnings.

MOFSL also listed a target of Rs 2,000 for BDL, alongside CMP Rs 1,473 and an implied upside of 35.8% in the provided data. Nirmal Bang cited a target of Rs 1,774.

Astra Microwave: multiple targets and order-linked commentary

Astra Microwave Products (AMPL) featured in multiple brokerage lists and was referenced with several price targets: Rs 1,150 (MOFSL), Rs 1,200 (ICICI Securities), Rs 1,120 (ICICI Direct), Rs 1,234 (Nirmal Bang), and Rs 1,067 (Geojit, accumulate).

MOFSL also provided valuation context, stating the stock was trading at 37.1x / 29.1x on FY27E/FY28E EPS, and reiterated a BUY with an unchanged target price of Rs 1,150, based on 38x two-year forward earnings.

Separately, ICICI Direct maintained a Buy rating on Astra Microwave Products with a target price of Rs 1,120, noting the company’s focus on higher-margin contracts. The provided text added that the target implied an upside of Rs 225 per share, or 25%, from the previous close of Rs 894.45.

The dataset also noted that Astra Microwave’s shares had risen 1,800% from Covid-19 lows below Rs 50 to Rs 949.90 on Tuesday, with a market capitalisation of Rs 9,000 crore. Another note mentioned management’s goal to double revenue in 3-4 years through programmes such as QRSAM, Uttam radars, Su-30 EW upgrades, and Virupaksha.

Private-sector picks: Solar and PTC in ICICI Securities’ list

ICICI Securities named Solar Industries (Target Price: Rs 17,200) and PTC Industries (Target Price: Rs 21,000) as its top picks from the private defence space. In the same set of references, ICICI Securities also issued buy calls with targets for Azad Engineering (Rs 1,900) and Midhani (Rs 445).

Nirmal Bang separately pegged Solar Industries at Rs 17,430.

Zen Technologies: neutral stance with order-book trigger

MOFSL suggested a Neutral rating on Zen Technologies with a target price of Rs 1,400. The note added that Zen expected an Rs 60 crore simulator order, which could lift its order book from Rs 1,430 crore to Rs 2,000 crore, largely executable over 18 months.

MOFSL also referred to Astra Microwave being positioned for QRSAM and EW-linked electronics opportunities, citing a Rs 25,000 crore long-term opportunity value in that context.

Market moves mentioned alongside the defence theme

The provided text also cited short-term price moves in a set of defence-linked names. Unimech Aerospace was mentioned as the top gainer, rising 4% to Rs 940. It was followed by Cochin Shipyard, Dynamatic Technologies, and Astra Microwave, each up 3.5% to Rs 1,521, Rs 9,800, and Rs 922, respectively.

Big-picture numbers investors are tracking

Beyond stock-specific targets, broker notes and reports referenced the scale of approvals and longer-term plans as key context.

InCred Equities said HAL, BEL, BDL, Astra Microwave and Data Patterns are set to emerge as key beneficiaries of India’s Rs 400,000 crore defence modernisation plan over the next decade, and it assigned ‘Add’ ratings to HAL and BEL with target prices of Rs 6,325 and Rs 459, respectively.

Conclusion

Broker targets across defence stocks have clustered around the theme of higher procurement visibility following Rs 79,000 crore of DAC clearances and elevated FY26 approval pace. The next set of cues will likely come from further procurement announcements, order inflows, and company-specific execution updates highlighted in brokerage notes, such as Zen’s simulator-order expectation and Astra Microwave’s programme pipeline references.