1 hr ago
Defence Firms Eye Strong Q2 as Major Orders Await Approval
A brokerage firm called Kotak expects several Indian defence companies to have a strong quarter from July to September 2026.
It says companies such as BEL, HAL and Solar Industries may grow because they are delivering products and carrying out existing programmes.
Solar Industries is expected to grow the fastest among the companies discussed.
Some shipbuilders may also grow, but they need new orders to keep their future work pipeline healthy.
Big defence orders worth about Rs 1.5 lakh crore are waiting for government approval.
Kotak says those orders need to be awarded in time to support revenue growth in 2029.
The firm is still cautious about the sector and has not changed its company estimates or ratings.
Kotak Institutional Equities expects BEL, HAL and Solar Industries to report strong revenue growth in July–September 2026, driven by programme execution and deliveries.
Solar Industries is forecast to lead growth, with revenue up about 47% year on year; BEL and HAL are projected to grow about 16% and 14%, respectively.
Mazagon Dock Shipbuilders’ revenue is expected to be broadly unchanged, while Cochin Shipyard is forecast to grow about 11%; Kotak flagged order-book replenishment as a concern for both.
Defence orders estimated at about Rs 1.5 lakh crore, including the QRSAM and P75I programmes, are awaiting Cabinet Committee on Security clearance.
Kotak said timely order awards are important for revenue growth in 2029, but retained its cautious sector view and left company estimates, fair values and ratings unchanged.
- Who
- Kotak Institutional Equities assessed prospects for Indian defence and precision engineering companies, including BEL, HAL and Solar Industries.
- What
- The report forecasts strong second-quarter growth for several firms while highlighting large defence orders awaiting government clearance.
- Where
- India.
- When
- The forecast covers the July–September 2026 quarter; Kotak said order awards within the next few months are important for 2029 revenue.
- Why
- Growth forecasts are based on ongoing programme execution and deliveries, while future growth depends in part on timely approval and award of major orders.
Near-term growth outlook
Order and execution risks
Revenue prospects
Near-term growth outlook
Kotak expects strong second-quarter growth at BEL, HAL and Solar Industries, supported by ongoing execution and deliveries.
Order and execution risks
Kotak says future growth visibility depends on converting large pending orders; shipbuilders also face concerns about replenishing order books.
Government order approvals
Near-term growth outlook
Pending orders, if awarded in time, could support revenue growth in 2029.
Order and execution risks
The orders are awaiting Cabinet Committee on Security clearance, and Kotak warns that delays could affect the timing of future growth.
Key facts
- Quarter covered
- July–September 2026 (2Q2027)
- Pending defence orders
- About Rs 1.5 lakh crore, according to Kotak
- BEL revenue forecast
- About 16% year-on-year growth
- HAL revenue forecast
- About 14% year-on-year growth to Rs 7,560 crore
- Solar Industries revenue forecast
- About 47% year-on-year growth
- Major pending programmes
- QRSAM: about Rs 30,000 crore; P75I: about Rs 90,000 crore
- Kotak sector view
- Cautious; company estimates, fair values and ratings unchanged
Quotes
Kotak Institutional Equities
Brokerage whose report provides forecasts for the defence companies.
“Solar Industries should lead growth with a sharp ramp-up in defence revenues, while BEL and HAL are expected to deliver healthy double-digit growth, driven by ongoing execution, Tejas trainer deliveries, HTT-40 handovers and Dhruv NG deliveries”
financialexpress.com
“Timely award of these orders within the next few months remains critical for 2029 revenues”
financialexpress.com
Sources
Related news
Kotak Sees Defence Spending Boosting Q2 Growth, Orders Key
India’s Defence Boom Faces a Test of Execution and Deliveries
ICICI Securities Names HAL, BEL and Azad Engineering Picks
ICICI Securities Names Defence Picks Ahead of Q2 Results
MOFSL Previews Q2 Defence Results, Names Top Stock Targets
HSBC Begins Coverage of Seven Indian Defence Stocks
India’s Defence Capital Spending Rises, With 69% Still Unused
India Inc Seen Posting Strong September-Quarter Earnings Despite Cost Pressures
Nykaa Shares Rise 6% After Strong Provisional Q2 Update
Indian Stocks in Focus as Companies Report Updates and Appointments
