Long-term purchase of defense shares: Elara Capital

Brokerage Elara Capital has long been beneficial to India’s defense industry due to its higher budget allocation and focus on self-reliance.

The growth prospects for the industry are very optimistic as the government focuses on increasing defense production and the growth of the manufacturing industry by Indian global company OEMs (Original Equipment Manufacturers).

“We are positive for India’s defense industry in the long run. In the space listed, we prefer Hindustan Aviation, Bharat Electronics and Bharat Dynamics on the PSU side,” said Elara Capital.

Among private sector companies, Elara Capital prefers Zen Technologies, Data Mode, Azad Engineering, Astra microwave products and Maini Precision products. However, these companies are not rated by brokerage firms.

Brokerage firm stresses defense minister Rajnath Singh ₹Rs 1.6 billion and exports ₹Rs 300 crore for fiscal year 26.

In addition, the alliance budget was allocated on 2025-26 ₹Ministry of Defense’s Rs 6.8 billion ₹Capital acquisition of 180,000 crore.

Defense Stock Purchase

Hindustan Airways (HAL) | Purchase | Previous Close: ₹3,287.40 |Target price: ₹5,160 | Upward Potential: 57%

According to Elara Capital, Hindustan Airways management expects the order book for fiscal 26 to be ₹250-260 million, from ₹As of December 2024, 130 million.

This will be led by two large orders from the 97 LCA Tejas MK 1A, plus 83 have been ordered, while 156 light combat helicopters (LCH) Prachand prachand is worth it ₹Ellala said that 1.3 million million will be realized in the next three to six months.

Also, the order is worth it ₹Rs 35,000 crore will receive SU-30 MKI upgrade,

India Multi-role Helicopter (IMRH) design, development and repair and overhaul (ROH) orders, with total expected inflows almost ₹The brokerage added Rs 1.7 billion for fiscal 26.

Bharat Electronics (BEL) | Purchase | Previous Close: ₹256.65 | Target price: ₹370 | Upward Potential: 44%

Bharat Electronics retains order inflow guidance, the brokerage notes ₹250 million fiscal year, despite inflows at the beginning of the year ₹119 million so far.

The company hopes order momentum will continue in FY26 and receives a large amount of fast-response ground-up missiles (QRSAM) value ₹250 million.

Elara Capital expects the company’s profit margin to remain around 24-25% over the next few years, led by Better Margin Orderbook.

“The order is currently on ₹As of January 2025, it is also increasing its presence in high-growth areas such as weapons and ammunition, artificial intelligence, cybersecurity, driverless systems, and railways and subways. The company aims to increase its share of defenseless capabilities in the coming years. ” Elara Capital noted.

Bharat Dynamics | Accumulated | Previous Close: ₹1,023.70 |Target price: ₹1,360 | Upward Potential: 33%

Bharat Dynamics has a strong order and strong order pipeline. Elara Capital said the company hopes to double its production in the upcoming three to five years and triple its production in the next 10 years.

The brokerage believes that with the help of executing domestic and export orders, the company will release a CAGR of 30% in the next two to three years. Current capacity utilization is close to 60%.

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