11 hrs ago
Emkay Names HAL Top Defence Stock Amid Sector Expansion
A brokerage called Emkay Global studied four Indian defence companies.
It believes India’s defence industry could grow substantially in the coming years.
Hindustan Aeronautics Limited, or HAL, was its favourite pick.
Emkay gave HAL a Buy rating and a target price of ₹5,950.
Bharat Electronics also received a positive outlook because it has strong research and development and many large projects.
Bharat Dynamics received an Add rating, but competition and higher research costs could reduce its profits for a while.
BEML was rated Buy because its large order book could support sales until FY29.
These targets are estimates from the brokerage, not guarantees of future share prices.
Emkay Global expects India’s domestic defence sector to sustain growth through policy support, private participation and rising exports.
India’s defence production is projected at ₹1.8 trillion and exports at ₹380 billion in financial year 2025-26.
Hindustan Aeronautics Limited received a Buy rating and ₹5,950 target, implying about 23% upside.
Bharat Electronics Limited received a ₹500 target, while Bharat Dynamics received an Add rating and ₹1,350 target.
BEML received a Buy rating and ₹2,600 target, supported by a ₹217 billion order book and opportunities through FY29.
- Who
- Emkay Global Financial Services assessed Hindustan Aeronautics Limited, Bharat Electronics Limited, Bharat Dynamics Limited and BEML Limited.
- What
- The brokerage issued ratings and share-price targets for four Indian defence companies.
- Where
- The companies are listed on the Bombay Stock Exchange, and the sector focus is India.
- When
- The assessment covers India’s expected defence-sector expansion, including financial year 2025-26 and forecasts through FY29.
- Why
- Growth expectations are supported by policy measures, private-sector participation, defence exports, domestic production and company-specific order pipelines.
Growth Case
Risk Case
Sector expansion
Growth Case
Policy support, greater private-sector participation and rising exports could support sustained growth across India’s defence industry.
Risk Case
The article provides growth projections but does not guarantee that production, exports or individual company earnings will meet those estimates.
Bharat Dynamics outlook
Growth Case
The company benefits from India’s expanding defence ecosystem and received an Add rating with a ₹1,350 target.
Risk Case
Increasing competition and higher research and development spending are expected to pressure margins in the near term.
Company selection
Growth Case
Emkay identified HAL as its top sector pick and also rated BEML and BEL positively because of earnings visibility, order pipelines and business opportunities.
Risk Case
The projected share-price gains are brokerage estimates, while factors such as execution, costs and competition could affect actual performance.
Key facts
- India defence production forecast
- ₹1.8 trillion in financial year 2025-26
- India defence exports forecast
- ₹380 billion in financial year 2025-26
- HAL target and rating
- Buy; ₹5,950 target; approximately 23% indicated upside
- BEL target
- ₹500 target; approximately 26% indicated upside
- Bharat Dynamics target and rating
- Add; ₹1,350 target
- BEML target and rating
- Buy; ₹2,600 target; approximately 24% indicated upside
- BEML order book
- ₹217 billion, with revenue visibility through FY29
Quotes
Emkay Global Financial Services
Brokerage cited in the research report covering HAL.
“We initiate coverage on the stock on the back of strong long-term earnings visibility, coupled with a robust >20% return ratio profile, benign valuation, and the stock trading at 32x its 1HFY29E EPS. HAL is our top pick in the sector.”
livemint.com
“A ₹217 bn order book anchors near-term revenue visibility through to FY29, while a pipeline of opportunities across MRVC AC EMUs, aluminium push-pull trainsets, and six live metro tenders provides long-term revenue visibility.”
livemint.com
Sources
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