Defence stocks: DAC approvals lift broker targets 2026

Why defence stocks are back in focus

Indian defence stocks moved back into the spotlight after the Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh, approved procurement proposals worth about Rs 52,000 crore on July 3, 2026. Broker notes also referenced a separate set of clearances around Rs 79,000 crore, keeping order visibility in focus across large public sector names and select private players. The immediate market narrative has centred on stronger medium-term order inflows and a clearer domestic procurement pipeline. Brokerages framed the latest Acceptance of Necessity (AoN) tranche as supportive for platforms and sub-systems that sit across air defence, electronics, missiles, and related manufacturing.

What brokerages highlighted from the AoN tranche

B&K Securities said the AoN tranche reinforced themes such as deeper air-defence layering, accelerated unmanned and ISR capabilities, and sustained localisation via Buy and Make. In the same note, the brokerage suggested a Buy on Bharat Electronics (BEL) and Hindustan Aeronautics (HAL), and a Hold on Bharat Dynamics (BDL). It also cited target prices of Rs 513 for BEL and Rs 1,278 for BDL, both linked to December 2027 earnings multiples. For HAL, B&K Securities maintained a Buy with an unchanged target price of Rs 5,467, based on 34 times December 2027 earnings.

BEL: targets cluster around Rs 459 to Rs 550

BEL featured prominently in multiple brokerage summaries, partly because it is cited as the lead system integrator for the Akash and MRSAM air defence systems. In one brokerage table, target prices mentioned for BEL included Rs 459 (InCred Equities, Add), Rs 470 (Nirmal Bang), Rs 500, and Rs 520 (Motilal Oswal), along with a higher Rs 550 target noted from Choice Broking. Motilal Oswal reiterated a Buy on BEL with an unchanged target of Rs 520, stating the target was based on 45 times two-year forward earnings. A separate Motilal Oswal reference cited BEL at a target of Rs 500 against a CMP of Rs 393, implying upside of 27.2%. Another cited example put BEL at a CMP of Rs 458 versus a target of Rs 520, implying about 14% upside.

HAL: multiple targets, with Tejas delivery clarity awaited

HAL also saw a wide band of target prices across notes, with references to Rs 5,300 (ICICI Securities), Rs 5,467 (B&K Securities), Rs 5,500 (Motilal Oswal), Rs 5,800 (Motilal Oswal), Rs 6,151 (Nirmal Bang) and Rs 6,325 (InCred Equities, Add). Motilal Oswal paired one HAL target of Rs 5,800 with a CMP of Rs 4,377 and an implied upside of 32.5%. Another Motilal Oswal summary cited HAL at a CMP of Rs 3,989 versus a Rs 5,500 target. One brokerage note also flagged that it was awaiting further clarity on Tejas deliveries, while still retaining a Buy view on HAL.

BDL: mixed calls and a wider target range

BDL was positioned differently depending on the brokerage. B&K Securities put a Hold rating on BDL with a target price of Rs 1,278, based on 42 times December 2027 earnings. Motilal Oswal, in an update after the winter-session clearances, maintained a Buy rating on BDL and cited multiple target references including Rs 1,800 (with about 35% potential upside cited in one table) and Rs 2,000 (paired with a CMP of Rs 1,473 and an upside of 35.8%). A separate brokerage summary also mentioned a BDL target price of Rs 1,900 with stated upside of 23%. Choice Broking maintained a Buy on BDL with a target price of INR 1,965, stating it valued the stock at 35 times FY28E EPS.

Other names in the broker round-up

Motilal Oswal reiterated Buy ratings on Astra Microwave Products (AMPL) and retained a Neutral view on Zen Technologies. For AMPL, target references included Rs 1,150 (paired with a CMP of Rs 1,008 and about 14% cited upside) and Rs 1,100 (paired with a CMP of Rs 979 and a 12.35% cited upside). For Zen Technologies, a Motilal Oswal reference showed a target price of Rs 1,400 versus a current price of Rs 1,386, indicating limited upside of about 1%, and the brokerage kept its stance Neutral.

ICICI Securities: top picks and a broader rating list

ICICI Securities said the support implied sustained double-digit compounded annual growth in defence capex, and it picked BEL, HAL, Astra Microwave and Solar Industries as top picks from the sector. In the same coverage, ICICI Securities cited a target price of Rs 5,300 for HAL as its top pick from the PSU defence space. The brokerage also listed a Buy on five defence stocks including HAL, Mishra Dhatu Nigam (MIDHANI), Astra Microwave, PTC Industries and Solar Industries, while assigning an Add on Azad Engineering, BDL, BEL and Zen Technologies. It recommended a Sell on Dynamatic Technologies. Elsewhere in the same compilation, ICICI Securities maintained a Buy rating on PTC Industries with a target price of Rs 21,000.

Goldman Sachs and Solar Industries in the DAC context

Solar Industries also appeared in the coverage, with Goldman Sachs setting a target price of Rs 18,215. The note referenced DAC clearances of proposals worth Rs 79,000 crore when discussing the stock as among top picks. While the targets differ across brokerages and timeframes, the common link in the summaries was the perceived strengthening of India’s defence procurement pipeline.

Key numbers and targets mentioned

Market impact: what the broker data suggests

The broker commentary shows how quickly defence-sector targets can reset after large procurement approvals, especially when approvals cover multiple categories such as air defence and surveillance. BEL, HAL and BDL stayed in focus because they are repeatedly positioned as direct beneficiaries of the procurement pipeline in the notes. At the same time, the range of targets for the same stock highlights differences in valuation frameworks, time horizons, and earnings assumptions across brokerages. For example, B&K Securities anchored BEL at Rs 513 using 45 times December 2027 earnings, while Motilal Oswal cited both Rs 500 and Rs 520 targets in different references, also tied to forward earnings multiples. For investors, the key practical takeaway from the compiled notes is not a single number, but the consistency of positive ratings on BEL and HAL, versus the more mixed stance on BDL (Hold in one note, Buy in others).

Conclusion

The DAC approvals of about Rs 52,000 crore on July 3, 2026, along with separate Rs 79,000 crore clearances referenced by brokerages, kept defence order visibility at the centre of market attention. Brokerages largely reiterated positive views on BEL and HAL, while BDL saw both Buy and Hold calls alongside a wider target range. Updates also extended to AMPL, Zen Technologies, PTC Industries, and Solar Industries, reflecting a broadening set of listed defence plays being tracked around procurement cycles. Further brokerage revisions are likely to track how these clearances translate into order inflows and execution timelines as subsequent announcements and deliveries become clearer.