India's Defence Sector Stocks Experience Strong Start to Fiscal Year 2027, HAL, BEL, and BDL Worth Considering for Investment

Defence Stocks Surge on Optimism and Procurement Approvals

Defence stocks staged a sharp rally on Wednesday, April 1, the first day of the new financial year 2026-27. Stocks such as Garden Reach Shipbuilders & Engineers (GRSE), Bharat Electronics (BEL), Hindustan Aeronautics (HAL), Mazagon Dock, Cochin Shipyard, Bharat Dynamics (BDL), and Astra Microwave Products witnessed strong gains after a string of robust business updates, fresh order wins, and provisional FY26 performance announcements.

The rally was supported by sustained optimism around India's defence manufacturing push and a recent wave of large procurement approvals, keeping the sector firmly in focus for investors looking for momentum as well as longer-term structural growth. Defence stocks rallied today, with several key players reporting significant gains.

GRSE Leads the Pack

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Leading the pack was GRSE, whose shares surged 20% to ₹2,365 on the BSE after the state-run shipyard reported its highest-ever annual turnover of ₹6,400 crore for FY 2025-26, up 26% from ₹5,076 crore in the previous fiscal year. The provisional and unaudited performance capped a landmark year in which GRSE delivered eight vessels to the Indian Navy — the highest in a single fiscal — including two Project 17A frigates, two Survey Vessel Large ships and four Anti-Submarine Warfare Shallow Water Crafts.

Midhani also saw strong buying, with the stock jumping 9.4% to its day's high of ₹296.40 on the BSE after the company reported its highest-ever sales despite supply chain disruptions. Midhani achieved record-breaking performance in FY 2025-2026, reaching its highest-ever sales of ₹1,206 Cr. (provisional and unaudited), a 12% year-on-year growth over the previous ₹1,074 Cr.

HAL, another defence PSU stock, rose 5.3% to its day's high of ₹3,671.30 after reporting revenue of ₹32,250 crore (provisional and unaudited) for the financial year ended March 31, 2026, compared with ₹30,981 crore in the previous year. The company said this was achieved despite challenges in deliveries of LCA Mk1A and HTI 40 due to supply chain issues arising from geopolitical and technical challenges.

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Sector Outlook

The sector had also received a recent boost after Defence Minister Rajnath Singh approved agreements worth around ₹2.38 lakh crore last week. According to reports, Singh cleared the Acceptance of Necessity (AoN) proposals during a meeting of the Defence Acquisition Council (DAC), the primary authority for defence procurement in India.

Investors are optimistic about the sector's growth prospects, with several brokerage firms maintaining a positive view on defence stocks. Motilal Oswal Financial Services has retained a "Buy" on Bharat Electronics, valuing the stock at ₹520 based on 45x two-year forward earnings. It has also retained a "Buy" on HAL, valuing the stock at ₹5,500 using a blend of DCF and 30x forward earnings.