Some Defence Stocks Fall Up to 50% as PL Capital Picks Bharat Electronics

Mumbai | 5 November 2026 

Samvat is the Hindu calendar year that begins at Diwali. Investors enter Samvat 2083 with a divided defence sector. Some stocks fell up to 50%, even though the defence ministry received a budget allocation of about ₹7.8 lakh crore over the past year. 

Why Did Defence Stocks Move in Opposite Directions? 

Uneven ordering explains most of the gap, according to Anwani. Orders arrived in large batches in financial years 2024 and 2025 (FY24, FY25) and part of FY26. Companies with shrinking order books or slow execution then fell behind. 

Shipbuilders: Order books at Garden Reach Shipbuilders and Engineers (GRSE) and Mazagon Dock Shipbuilders (MDL) shrank as new orders slowed. 

Aircraft maker: Hindustan Aeronautics Limited (HAL) faced execution delays and depends on imported General Electric (GE) engines. 

Is India on Track to Meet Its FY29 Defence Targets? 

Anwani expects India to meet both targets. Based on orders won and in the pipeline, he expects defence production to grow at a compound annual growth rate (CAGR) of at least 15% for four to five years. 

The private sector contributes at least 50% of defence exports. 

When Will New Orders Reach Company Order Books? 

Approvals of necessity (AoN), the government’s go-ahead for a planned defence purchase, crossed ₹18 lakh crore over the last three financial years. Anwani expects these orders to be tendered over the next two to three years. 

On 3 November 2026, a next-generation corvette order worth more than ₹53,000 crore was announced, with more than ₹30,000 crore going to GRSE. This lifts the GRSE order book above ₹40,000 crore. 

On 4 November 2026, the government approved about ₹50,000 crore for indigenous shipbuilding programmes. Ships take more than four to five years to build, so Anwani expects these orders to add to revenue beyond two years. 

What Is PL Capital’s Preferred Defence Stock? 

Bharat Electronics (BEL), which PL Capital covers, is Anwani’s preferred pick with a medium to long-term view. According to Anwani, the stock traded at about 28x estimated FY29 earnings at ₹365 on 4 November 2026. 

Electronics make up more than 40 to 50% of a drone’s content, which Anwani sees as an opportunity for BEL. 

Outlook 

Anwani named three triggers to track over the next 12 months. These are order books filling again as approved projects turn into contracts, fixes to supply problems, especially at HAL, and faster execution at large platform makers. The key risks are supply disruptions, imported semiconductors and batteries in drones, and the need for higher research and development (R&D) spending. 

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Disclaimer: Amit Anwani is Vice President, Institutional Research at PL Capital (Prabhudas Lilladher Pvt Ltd).  

This article is for informational purposes only and should not be construed as investment advice. The stock preference and valuation views are those of the analyst. 

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