Archive · 8 Sep 2026
Jefferies Sets Defence Stock Targets, Favors Solar and Astra
Jefferies, a financial research firm, studied three Indian defence companies.
It expects India to spend more money on defence equipment over the next four years.
It also expects India’s defence exports to grow.
Solar Industries received a Buy rating and a target price of Rs 28,160.
Its defence business is expected to become a larger part of its sales.
Astra Microwave Products also received a Buy rating, with a target of Rs 2,055.
Bharat Dynamics received a Hold rating because Jefferies said execution problems could limit its upside.
Jefferies still expects Bharat Dynamics’ earnings per share to grow strongly.
Jefferies expects India’s domestic defence capital spending to grow at a 16% compound annual rate over the next four years.
Defence exports are projected to rise at an 11% CAGR over FY26-30E to Rs 58,400 crore.
Jefferies initiated coverage on Solar Industries and Astra Microwave Products with Buy ratings and targets of Rs 28,160 and Rs 2,055, respectively.
Solar Industries’ defence business is expected to expand from 27% to 40% of sales, supporting a projected 31% earnings CAGR over FY26-30E.
Jefferies rated Bharat Dynamics Hold with a Rs 1,280 target, citing execution issues despite projected 30% EPS growth.
- Who
- Jefferies and the defence companies Solar Industries, Astra Microwave Products, and Bharat Dynamics.
- What
- Jefferies initiated coverage, issued stock ratings and target prices, and forecast growth for India’s defence industry.
- When
- The forecasts cover FY26-30E; the target-price valuations use September 2028 estimates.
- Where
- India’s defence and listed-equity markets.
- Why
- Jefferies expects rising domestic defence spending, stronger exports, expanding defence businesses, and improved operational validation of Indian-made systems.
Positive outlook
Cautious outlook
Solar Industries and Astra Microwave Products
Positive outlook
Jefferies rates both companies Buy, citing defence-led growth, expanding business opportunities, and operating leverage.
Cautious outlook
The article does not identify a specific opposing analyst view, but the target prices depend on high valuation multiples of 70 times and 55 times September 2028 estimated earnings.
Bharat Dynamics
Positive outlook
Jefferies expects 30% EPS CAGR over FY26-30E as execution scales up from a low base.
Cautious outlook
Jefferies rates the company Hold because execution issues limit expected upside; its Rs 1,280 target is valued at 50 times September 2028 estimated earnings.
Private-sector defence companies
Positive outlook
Private companies’ share of revenue among key listed defence firms rose to 16% in FY26 from 9% in FY23, indicating increasing participation.
Cautious outlook
State-owned companies remain dominant in the defence sector.
- Domestic defence spending growth
- Expected to rise at a 16% compound annual rate over the next four years.
- Defence exports
- Projected to grow at an 11% CAGR over FY26-30E to Rs 58,400 crore.
- Solar Industries target
- Rs 28,160; Jefferies initiated coverage with a Buy rating.
- Astra Microwave Products target
- Rs 2,055; Jefferies initiated coverage with a Buy rating.
- Bharat Dynamics target
- Rs 1,280; Jefferies initiated coverage with a Hold rating.
- Solar Industries earnings outlook
- Projected 31% earnings CAGR over FY26-30E.
- Astra Microwave Products earnings outlook
- Projected 28% profit-after-tax CAGR over FY26-30E.
- Bharat Dynamics earnings outlook
- Projected 30% EPS CAGR over FY26-30E.