defense sector
India’s defense sector has now entered a new era. Due to the government’s policies of Make in India and Self-reliant India, a lot of activity is being seen in the defense sector. Meanwhile, according to a report by Financial Express, a recent report by brokerage firm Nuvama said that in the coming 5 to 7 years, new orders worth about Rs 8.5 to 9 lakh crore are likely to open in the defense sector. This means that now this sector is becoming a golden opportunity not only for the country’s security but also for the economy and investors.
new defense supercycle
According to the Nuvama report, India’s defense capital expenditure will grow at the rate of about 14% every year between FY25 and FY30, which is much higher than the world average. India is no longer just a country that buys defense equipment, but is moving towards manufacturing them itself. The brokerage believes that in this new defense supercycle, companies like BEL, HAL, Solar Industries, MDL, CSL and DPIL are ready to take a big leap in the coming years.
HAL: Opportunities abound, but pace slow
According to Nuvama, Hindustan Aeronautics Limited (HAL) has the largest order backlog, which is about Rs 4.7 lakh crore. It has become India’s largest defense company, but the speed of delivery is not as fast as it should be. For example, the target was to deliver 12 units of Tejas Light Combat Aircraft, but now only 7 will be completed.
However, HAL has tremendous opportunities for the next 10 years, especially through aircraft, engine and upgrade programs. The company is going to make a capital investment of about Rs 1.5 lakh crore in the next few years, due to which its production scale can increase significantly in the coming time.
BEL: First choice of investors
Bharat Electronics Limited (BEL) has been described by Nuvama as the most structural and reliable company in the defense sector. The company has an order backlog of more than Rs 1 lakh crore and its margins have consistently been good at around 28%. BEL’s performance has always been better than market expectations. For example, the company’s operating margin in Q1FY26 stood at 28.1%, compared to estimates of 27%. This growth is due to better localization and operational efficiency.
The company is soon expected to get orders for QRSAM (Quick Reaction Surface-to-Air Missile), which can be worth around Rs 3 lakh crore. If these orders come, then BEL’s growth and margins may accelerate further.
Keeping an eye on Mazagon Dock and Cochin Shipyard
Mazagon Dock Shipbuilders Limited (MDL) and Cochin Shipyard Limited (CSL) have also strengthened their presence. Both of them together have orders worth about Rs 4.6 lakh crore. These orders are related to the construction of warships and submarines for the Indian Navy.
Solar Industries India: Explosive entry into defence.
Solar Industries India is progressing rapidly. Its defense business now accounts for 20% of the company’s total revenue, which was only 2% in FY18. Not only this, the backlog of the company is also more than Rs 16,800 crore and the margin is expected to be above 25%. That means this company is fast becoming a big name in the defense manufacturing of the country.
Data Patterns: Big power in small size
Data Patterns India Ltd (DPIL) is still a small company, but its growth is quite fast. It is estimated that its revenue may reach Rs 1,169 crore in the second quarter of FY26, which is an annual growth of 28.5%. The company’s margins and operational efficiency compete with other players in the sector, making it an interesting option for investors.