Stocks to Buy: Defence stocks that can deliver returns of up to 32%; Are you holding any?

Synopsis: B&K Securities has set target prices of ₹5,610 for Hindustan Aeronautics Limited and ₹513 for Bharat Electronics Limited, highlighting strong growth potential in India’s defence manufacturing and electronics sectors.

India’s defence sector is gaining strong momentum amid rising indigenisation and modernisation efforts. Backed by a robust order inflow environment, B&K Securities has identified two defence stocks that are well positioned to benefit from this long-term growth trend, with upside potential of up to 32 percent from current levels.

Here are a few Defence stocks to buy for an upside potential of up to 32 percent

Hindustan Aeronautics Limited

With a market capitalization of Rs. 2,87,282.33 crore, the shares of Hindustan Aeronautics Limited were currently trading at Rs. 4,295.65 per equity share, down nearly 0.17 percent from its previous day’s close price of Rs. 4,302.80. 

B&K Securities, a prominent brokerage firm, has recommended a “Buy” call on Hindustan Aeronautics Limited with a target price of Rs. 5,610 per share, indicating an upside potential of 30.60 percent 

B&K Securities’ Buy rating on Hindustan Aeronautics reflects its view that India’s defence aerospace sector is entering a high-growth phase, with strong indigenous manufacturing momentum. HAL’s expanding order book, technological capabilities, and critical role in defence modernization position it for sustained long-term growth.

Order Book: Hindustan Aeronautics Limited (HAL) reported a sharp improvement in its order book, which rose to Rs. 1,89,300 crore as of March 2025, compared to ₹94,127 crore in the previous year. This strong growth reflects robust demand visibility and a solid long-term business outlook for the company.

Hindustan Aeronautics Limited (HAL) was established on December 23, 1940, as Hindustan Aircraft Limited. HAL is engaged in designing, developing, manufacturing, and maintaining advanced aircraft, helicopters, engines, avionics, and aerospace systems for India’s defence forces and civil aviation.

Recent quarter results

Coming into financial highlights, Hindustan Aeronautics Limited’s revenue has increased from Rs. 5,976 crore in Q2 FY25 to Rs. 6,629 crore in Q2 FY26, which has grown by 10.93 percent. The net profit has also grown by 10.53 percent from Rs. 1,510 crore in Q2 FY25 to Rs. 1,669 crore in Q2 FY26.

Hindustan Aeronautics Limited’s revenue and net profit have grown at a CAGR of 7.64 percent and 23.74 percent, respectively, over the last five years.

In terms of return ratios, the company’s ROCE and ROE stand at 33.9 percent and 26.1 percent, respectively. Hindustan Aeronautics Limited has an earnings per share (EPS) of Rs. 127, and it’s an almost debt-free company.

Bharat Electronics Limited

With a market capitalization of Rs. 2,83,144.28 crore, the shares of Bharat Electronics Limited were currently trading at Rs. 387.35 per equity share, down nearly 0.59 percent from its previous day’s close price of Rs. 389.65. 

B&K Securities, a prominent brokerage firm, has recommended a “Buy” call on Bharat Electronics Limited with a target price of Rs. 513 per share, indicating an upside potential of 32.44 percent.

B&K Securities’ Buy rating on BEL is driven by the view that India’s defence modernisation is becoming increasingly dependent on advanced electronics, where BEL holds a leadership position. With strong capabilities in indigenisation and a robust order pipeline, BEL is well placed to benefit from this long-term structural shift.

Order Book: As of 1st October 2025, Bharat Electronics Limited (BEL) has a strong order book of ₹74,453 crore, reflecting healthy demand for its defence and electronics solutions. During the current financial year up to the same date, the company has already secured fresh orders worth ₹12,539 crore, supporting its long-term growth outlook.

Bharat Electronics Limited (BEL) was established in 1954 in Bengaluru under India’s Ministry of Defence. The company is a Navratna public sector undertaking engaged in designing, manufacturing, and supplying advanced electronic products for the defence and civilian sectors.

Recent quarter results

Coming into financial highlights, Bharat Electronics Limited’s revenue has increased from Rs. 4,605 crore in Q2 FY25 to Rs. 5,792 crore in Q2 FY26, which has grown by 25.78 percent. The net profit has also grown by 17.75 percent from Rs. 1,093 crore in Q2 FY25 to Rs. 1,287 crore in Q2 FY26. Bharat Electronics Limited’s revenue and net profit have grown at a CAGR of 12.88 percent and 23.87 percent, respectively, over the last five years.

In terms of return ratios, the company’s ROCE and ROE stand at 38.9 percent and 29.2 percent, respectively. Bharat Electronics Limited has an earnings per share (EPS) of Rs. 7.79, and it’s an almost debt-free company.

Written By – Nikhil Naik

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