Nirmal Bang Institutional Equities, in its latest report, highlighted sustained positive momentum in the defence sector, driven by multiple factors including a strong government focus on indigenisation. It cited higher defence budget allocations, rising geopolitical tensions, an expanding list of indigenised products, growing potential for defence exports, and increased investments in advanced technologies such as artificial intelligence and robotics, as favourable for the sector.
For now, Nirmal Bang has preference for Solar Industries, identifying it as a key beneficiary of sector tailwinds. It also offered price targets for eight other defence stocks, including Hindustan Aeronautics Ltd (HAL), Bharat Dynamics Ltd (BDL), Bharat Electronics Ltd (BEL), Mazagon Dock Shipbuilders Ltd, and BEML, ahead of their Q4 results.
Mazagon Dock Shipbuilders
Mazagon Dock Shipbuilders has projected a 12-15 per cent PBT margin over the next three years, given the current rate of execution, significant booking revenue, and a healthy order pipeline. Nirmal Bang said the defence player is likely to exceed expectations. At present, the stock is trading at a one-year PE ratio of 29.7 times.
“Given the timely implementation of platforms, strong revenue visibility over three years, and a growing order book, we maintain our Buy rating on this stock. We value Mazagon Dock at 26.5 times March 2027 EPS (earlier 25 times) which is above its three-year average PE of 16.6 times, with a target price of Rs 2,801 implying an upside of 15.2 per cent,” Nirmal Bang said.
Astra Microwave Products
The Astra Microwave stock is currently trading at a one-year forward P/E ratio of 28.5 times, at par with its five-year average of 29 times. Nirmal Bang maintained ‘Hold’ and valued Astra Microwave at 29 times March 2027 EPS, which is its 5-year average, with a target price of Rs 738.
Bharat Dynamics (BDL)
Nirmal Bang said BDL is trading at a 1-year forward P/E ratio of 39.3 times, which is higher than its 5-year average of 25.8 times. It maintained ‘Hold’ rating on BDL, valuing it at 28 times March 2027 EPS, slightly above the 5-year average PE, with a target price of Rs 1,264.
Bharat Electronics (BEL)
Bharat Electronics is trading at a one-year forward PE of 40.8 times, above the 5-year average PE of 20.7 times. The BEL stock has corrected 16 per cent from its 52-week high. Nirmal Bang maintain ‘Hold’ rating on the stock. It valued BEL at 35 times March 2027 EPS, which is +1SD above its 5-year average, supported by a healthy order book significantly exceeding historical levels. The target price stood at Rs 282.
BEML
The BEML stock has declined 45 per cent from its 52-week high. Currently, the stock is trading at a 1-year forward EV/Ebitda of 19.2 times, which is below its 5-year average of 21 times. Nirmal Bang values the BEML stock at 21 times expected March 27 Ebitda, in line with the 5-year average EV/Ebitda. The brokerage suggested a target price of Rs 4,100 for the stock.
Data Patterns
The Data Patterns stock is currently trading at a 1-year forward PE of 41.8 times, which is below its 3-year average of 52 times. Nirmal Bang has maintained a ‘Buy’ rating on Data Patterns, valuing the stock at 50 times its estimated EPS for December 2026. This valuation, slightly below its 3-year historical average PE, is supported by a robust order book, the brokerage said while setting a target price of Rs 2,255 on the stock.
Hindustan Aeronautics (HAL)
The HAL stock has corrected by 28 per cent from a 52-week high and is currently trading at a 1-year forward P/E of 28.4 times, above its 5-year average PE of 14 times. Nirmal Bang maintained a ‘Buy’ rating on the stock with a target price of Rs 4,851 against Rs 4,655 earlier, valuing the stock at 24 times March 2027E EPS, +2 SD above the long-term average, supported by a strong order book. It arrived at a target price of Rs 4,851, implying an upside potential of 18.1 per cent.
Paras Defence and Space Technologies
Nirmal Bang said the revenue, Ebitda and PAT growth CAGR for Paras Defence is pegged at 25 per cent, 25 per cent, and 23 per cent, respectively, over FY25-FY27. The defence stock has corrected 39 per cent from its 52-week high and is trading at a 1-year forward PE of 55.6 times. This is below the 2-year average PE of 62 times. Nirmal Bang retained its ‘Buy’ and valued PARAS at 62 times March 2027 EPS, in line with the 2-year average PE, to arrive at a target of Rs 1,329.
Solar Industries
The Solar Industries stock is trading at a 1-year forward PE ratio of 57.6 times, lower than its 5-year average of 39 times. Nirmal Bang assumed coverage of Solar Industries recently and maintained ‘Buy’ valuing it at 46 times March 2027 EPS (+1SD above the mean), with a target price of Rs 13,237.
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