The Defence Acquisition Council has approved ₹670 billion in new proposals for the Army, Navy, and Air Force, covering procurements from autonomous surface craft to thermal imaging night sights. This move underscores the government’s push to strengthen domestic defence manufacturing, potentially triggering fresh orders for select listed defence companies whose stock prices have recently corrected.
Bharat Electronics (BEL)
BEL, a key defence PSU with 51.1% government ownership, is poised to benefit from orders for thermal imager-based driver night sights, missile system upgrades, and radars. Q1FY26 revenue rose 4.6% YoY to ₹44.4 billion, with PAT up 22.5% to ₹9.7 billion on strong margin gains. The company holds a ₹749 billion order book (3x revenue) and expects significant inflows, including ₹300+ billion QRSAM orders by Q4FY26. BEL is expanding into networking, data centers, and cybersecurity, but trades at a high P/E of 52x versus a 10-year median of 24x.
Astra Microwave
Specializing in defence, aerospace, and space electronics, Astra is set to gain from mountain radar orders and missile programme subsystems. FY25 revenue grew 15.7% YoY to ₹10.5 billion, with margins expanding to 25.6% and PAT up 27% to ₹1.5 billion. With a ₹23 billion order book (2.2x revenue) and a FY26 target of ₹14 billion in orders, the company is advancing anti-drone systems, tactical radars, and space-related products. It trades at a premium P/E of 60x compared to its historical 33x.
Hindustan Aeronautics (HAL)
HAL, India’s largest defence PSU, will benefit from Medium Altitude Long Endurance (MALE) drone orders under the DRDO programme. FY25 revenue rose 2% to ₹301 billion, while PAT grew 9.7% to ₹83.6 billion on operational efficiencies. Its ₹1.9 trillion order book (6x revenue) includes contracts for aircraft, helicopters, and engines. Future prospects include ₹1 trillion in manufacturing and ₹200 billion in repair orders. HAL is investing ₹150 billion in manufacturing expansion and ROH facilities, cementing its role in India’s defence localization push.
