Archive · 27 Jan 2026
Defence Sector Growth and Challenges
The Indian defence sector is growing fast, with a big budget and lots of orders.
Three companies, BEL, HAL, and Solar Industries, are doing well but face some challenges.
BEL has a huge order book and is working on new projects.
HAL has a lot of orders but is having trouble getting parts from other countries.
Solar Industries is moving from making explosives to making defence products and is doing well in exports.
All three companies have good profits, but they need to show they can finish their orders on time.
The government is likely to increase the defence budget, which is good for these companies.
Indian defence sector saw a robust budgetary outlay of ₹1.8 lakh crore in Budget 2025, with over 50% utilized in H1FY26.
Bharat Electronics (BEL) has an order book of ₹75,600 crore and expects a ₹30,000 crore QRSAM order by March 2026.
Hindustan Aeronautics (HAL) has a ₹2.3 lakh crore order book but faces supply chain bottlenecks, particularly with GE engines for LCA Tejas Mk1A.
Solar Industries is pivoting from industrial explosives to defence, aiming for 50% defence revenue by FY28, with a strong export growth strategy.
All three companies have strong return ratios but face execution credibility tests to meet their order backlogs.
- Who
- Bharat Electronics (BEL), Hindustan Aeronautics (HAL), Solar Industries
- What
- Defence sector growth, challenges, and opportunities ahead of Budget 2026
- When
- Post-Budget 2025, with data as of December 2025 and January 2026
- Where
- India
- Why
- To analyze the defence sector's strong order pipeline and execution capabilities
- Defence Budget 2025
- ₹1.8 lakh crore
- H1FY26 Utilization
- Over 50%
- Acceptances of Necessity (Last 36 Months)
- ₹9 lakh crore
- Defence PSU Pipeline
- ₹10 lakh crore
- Expected Defence Budget Hike 2026
- 10-15%
- BEL Order Book (Oct 2025)
- ₹75,600 crore
- HAL Order Book
- ₹2.3 lakh crore
- Solar Industries Defence Order Book
- ₹15,500 crore
- Solar Industries Defence Revenue (H1FY26)
- ₹900 crore (22% of revenue)
- Solar Industries Target Defence Revenue Share
- 50% by FY28
