9 months ago
Jefferies Highlights India's Defence Capex Surge
Jefferies, a big investment company, has noticed that India is spending a lot more money on defence, even though some other government spending has gone down.
They think this is a good time to invest in companies that make things for defence, like aeroplanes and engines.
They also think that companies involved in building roads and railways are doing well.
Jefferies has given some companies special ratings, saying their stock prices could go up a lot.
For example, they think Hindustan Aeronautics could go up by 38%.
They believe that defence and power companies have good visibility for future spending, which makes them good investment choices.
Jefferies reports a 68% year-to-date surge in India's defence capex, outpacing budget estimates.
Central government capex fell 28% in October 2025, but year-to-date spending is up 32%.
Rail and road capex are progressing faster than estimated, with year-to-date growth of 4% and 20% respectively.
Jefferies highlights Hindustan Aeronautics (HAL) with a 38% potential upside as a top pick.
Other key companies with Buy ratings include Larsen & Toubro (L&T), Bharat Electronics (BEL), and Siemens Energy.
- Who
- Jefferies, an investment brokerage
- What
- Highlighted a major shift in India's capex cycle with a significant surge in defence spending
- Where
- India
- When
- October 2025
- Why
- To inform investors about potential opportunities in defence and related sectors
Key facts
- Central Government Capex (Oct 2025)
- Down 28% YoY
- Year-to-Date Capex Growth
- Up 32%
- Defence Capex (YTD)
- Up 68% YoY
- Rail Capex (YTD)
- Up 4%
- Road Capex (YTD)
- Up 20%
- L&T Target Price
- Rs 4,715 (17% upside)
- HAL Target Price
- Rs 6,220 (38% upside)
- BEL Target Price
- Rs 510 (23% upside)
Quotes
Jefferies
A brokerage house analyzing India's capex cycle.
“64-65% capex of FY26 BE has been achieved till date for road and rail and indicates targets should be met by year-end.”
financialexpress.com
“DEA spend down 57% YoY YTD – likely to follow the FY25 trend of being largely unutilised.”
financialexpress.com
