Antique Stock Broking’s preferred picks in the defence sector are Mazagon Dock Shipbuilders Ltd, Hindustan Aeronautics (HAL), Bharat Electronics (BEL), Bharat Dynamics (BDL), PTC Industries, and Zen Technologies, all retaining a BUY rating.
HAL being a monopoly play in defence aerospace is seen emerging as one of the key beneficiaries of the ordering momentum. Antique retained its positive stance on HAL with a target price of Rs 6,360, valuing Tejas maker at 40 times its 1HFY28E EPS.
With warfare systems now witnessing a considerable increase in electronic components, BEL is expected to benefit materially across key platforms. Antique maintained ‘Buy’ rating on this stock with target price of Rs 454.
Mazagon Dock’s March quarter and June quarter Ebitda margins were marred by outsized provisions related to two orders. Starting September quarter, Antique expects the elevated provisioning to taper off sharply. Additionally, if actual cost of procurement of the main equipment for these two orders turn out to be lower than projected, then we may even see a write-back of provisions, it said.
At near optimal and full utilisation of the under-implementation mega aerospace materials complex, PTC Industries’ consolidated revenue can grow 10-20 times in 5-6 years, Antique Stock Broking said.
“While Zen Tech has delivered impressive profit growth in recent years, near-term earnings visibility is clouded by delays in order finalization, which may lead to a temporary pause in growth in FY26E. However, given the sizeable opportunity both in the Simulation and ADS segments, we anticipate a rebound from FY27E,” Antique said.
The Ministry of Defence has released the Technology Perspective and Capability Roadmap (TPCR) 2025, outlining the Army, Navy, and Air Force’s weapon system requirements over the next 15 years. Following the TPCR editions of 2013 and 2018, the latest report details quantity, life cycle, general criteria, and preferred technologies, offering a glimpse into India’s future defence plans. According to the report, the Indian Navy requires one aircraft carrier, five to ten destroyers and frigates, 200 to 250 long-range missiles, 20,000 to 50,000 anti-tank guided missiles, 300 to 400 light tanks, and 1,700 to 1,800 Future Ready Combat Vehicles to replace T-72 tanks. These numbers align with media reports and indicate significant opportunities for Indian defence manufacturers.
Antique said the TPCR 2025 reflects the Atmanirbhar Bharat initiative, emphasising indigenous research, development, and production, and lists 453 products compared with 221 in the 2018 edition, showing a greater push for self-reliance and private sector participation.
Early 2025 reports suggested shelving the third indigenous aircraft carrier, but the TPCR confirms the Navy’s intent to acquire it, possibly nuclear-powered and equipped with an electromagnetic launch system, with a projected cost of up to Rs 50,000 crore, benefiting Cochin Shipyard, which built INS-I. The Army plans to introduce Future Ready Combat Vehicles, light tanks for high-altitude operations, UAV-launched precision-guided munitions, and cyber-hardened communication systems.
The Navy is set to induct next-generation destroyers, frigates, corvettes, mine countermeasure vessels, and develop ten nuclear propulsion systems for carriers alongside the third carrier. The Air Force aims to deploy stratospheric airships, long-range cruise missiles, tactical high-energy laser systems, and hardened precision-guided munitions. Procurement will also increase for UAVs, electronic warfare systems, anti-drone systems, and decoys. The MoD has also unveiled the Defence Procurement Manual 2025, rewriting the rules for revenue procurement of spares, ammunition, maintenance, and services worth nearly Rs 1 lakh crore annually.
The manual removes the requirement for private companies to secure no objection certificates from defence PSUs before bidding and adopts a collaborative stance with minimal penalties during prototype development and capped damages overall, replacing the punitive approach of the 2009 manual.