12 hrs ago
ICICI Securities Names Defence Picks Ahead of Q2 Results
ICICI Securities shared its expectations for defence companies before their September-quarter results.
It picked HAL, BEL and Azad Engineering as its preferred stocks.
The brokerage thinks government spending and possible new contracts could support the sector.
It expects many government-owned companies to have modest revenue growth this quarter.
Some private companies may grow faster.
It expects BEL and Mishra Dhatu Nigam to show steady progress, while HAL may have a quieter quarter.
It also expects BDL’s revenue and profits to fall compared with the same quarter last year.
These are forecasts from the brokerage, not reported results.
ICICI Securities named HAL, BEL and Azad Engineering as preferred defence picks, citing supportive policy and export opportunities.
The brokerage expects defence capital expenditure to grow at a sustained double-digit CAGR and order momentum to improve in H2FY27.
It said Rs 2–3 lakh crore of potential orders could become RFPs and contracts over the next 12–18 months.
For the September quarter, it expects PSU defence companies to report flat-to-lower-double-digit revenue growth, while some private firms could grow 10–50% year over year.
Its estimates include 15% revenue growth for BEL and Mishra Dhatu Nigam, 6% for HAL, and declines in BDL’s revenue, EBITDA and profit.
- Who
- ICICI Securities and the defence companies covered in its Q2 outlook.
- What
- The brokerage issued forecasts for September-quarter results and named HAL, BEL and Azad Engineering as preferred picks.
- Where
- India’s defence sector.
- When
- Ahead of the September quarter results; the article also discusses expected order activity over the next 12–18 months and in H2FY27.
- Why
- ICICI Securities cited supportive government policy, potential contract awards, export opportunities and geopolitical factors.
Key facts
- Preferred picks
- HAL, BEL and Azad Engineering
- MoD capital outlay target
- Rs 3 lakh crore by 2029
- Defence procurement approvals
- Rs 8 lakh crore over the past 18 months, according to ICICI Securities
- Potential orders
- Rs 2–3 lakh crore could become RFPs and contracts over the next 12–18 months
- Expected PSU revenue growth
- Flat to lower-double-digit year over year
- BEL revenue forecast
- 15% year-over-year growth
- HAL revenue forecast
- 6% year-over-year growth
- BDL forecast
- Revenue down 2%, EBITDA down 15% and PAT down 17% year over year
Quotes
ICICI Securities
Domestic brokerage cited in the article for its defence-sector outlook.
“The geopolitical backdrop continues to provide a structural tailwind, as the Middle East conflict has reinforced defence budget urgency across the GCC. Indian OEMs with established export track records or MoUs are likely to benefit disproportionately, especially in the areas of missiles, drones, aerospace, defence electronics and radars. HAL, BEL and Azad are our preferred picks.”
businesstoday.in
“Government policy remains firmly supportive, evidenced by the MoD’s capital outlay target of Rs 3 lakh crore by 2029 and expanding footprint in the export region. We expect sustained double-digit CAGR in defence capex. Furthermore, with defence procurement approvals worth Rs 8 lakh crore in the past 18 months, order inflow momentum could pick up in H2FY27.”
businesstoday.in
Sources
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