Archive · 23 Jul 2026
Defence Stocks Trading Below Peers Amid Growth
India's defence sector grew a lot in FY26, with production and exports reaching new highs.
Three defence companies—Hindustan Aeronautics, Garden Reach Shipbuilders, and Mishra Dhatu Nigam—are trading at lower valuations compared to their peers.
Hindustan Aeronautics is facing delays in delivering Tejas aircraft but has a strong order book.
Garden Reach Shipbuilders is expanding its capacity and awaiting a big corvette contract.
Mishra Dhatu Nigam is expanding its production but faces raw-material risks.
Investors are cautious about these companies due to execution risks and high valuations, while the companies focus on future growth and order pipelines.
India's defence production rose 15.6% to Rs 1.78 lakh crore in FY26.
Defence exports reached a record Rs 38,424 crore in FY26.
Hindustan Aeronautics trades at 19.2x EV/EBITDA, below peers but above its historical average.
Garden Reach Shipbuilders has an order book of Rs 15,324 crore and is expanding capacity.
Mishra Dhatu Nigam faces raw-material risks and trades at 28.7x EV/EBITDA.
- Who
- Hindustan Aeronautics, Garden Reach Shipbuilders, Mishra Dhatu Nigam
- What
- Defence stocks trading below peer valuations
- When
- FY26
- Where
- India
- Why
- Due to execution risks, order replenishment, and raw-material dependencies
Investor Perspective
Company Perspective
Valuation Concerns
Investor Perspective
Investors are cautious about high valuations and seek cheaper stocks with lower EV/EBITDA ratios.
Company Perspective
Companies argue that their valuations reflect strong growth potential and future order pipelines.
Execution Risks
Investor Perspective
Investors worry about delays in deliveries and execution risks affecting earnings.
Company Perspective
Companies emphasize their capacity expansion and order book strength to mitigate execution risks.
- Defence Production Growth
- 15.6% increase in FY26
- Defence Exports
- Rs 38,424 crore in FY26
- Private Sector Share
- 24% of defence production
- Hindustan Aeronautics EV/EBITDA
- 19.2x
- Garden Reach Shipbuilders EV/EBITDA
- 24.9x
- Mishra Dhatu Nigam EV/EBITDA
- 28.7x
- Sector Peer Median EV/EBITDA
- 36.2x