BEML, BDL, HAL, BEL, MTAR shares rise up to 5%; Macquarie, Goldman Sachs, others pick top bets -

Defence stocks such as MTAR Technologies Ltd, Hindustan Aeronautics Ltd (HAL) and BEML Ltd led gainers on the Nifty Defence index in Tuesday's trade following the Defence Acquisition Council's (DAC) approval of capital procurement proposals worth Rs 2.12 lakh crore. Others such as Bharat Electronics Ltd (BEL), Mazagon Dock Shipbuilders Ltd (MDL) and Garden Reach Shipbuilders & Engineers Ltd (GRSE) are amid hopes of strong orders ahead.

With its increased focus on self-reliance, the Defence Ministry mandates that 82 per cent of procurements be made from Indian industry, a move it expects to support the development of the domestic defence ecosystem, Macquarie noted. The foreign brokerage remained positive on India's defence sector, with BEL as its preferred stock bet. It recommended 'Outperform' on the stock with a target price of Rs 550.

"We note key points: 1) Focus on combat equipment for both Army and Navy; 2) Proposals related to Light multi-role helicopters likely to aid HAL; 3) DPSUs such as HAL, BEL, Mazagon Dock Shipbuilders and Bharat Earth Movers Limited (BEML) could be positioned to benefit from the proposals approved," Goldman Sachs said.

MTAR Technologies Ltd jumped 5 per cent to hit its upper circuit limit at Rs 6,897.85. BEML shares rose 2.95 per cent to Rs 1,899, while BEL gained 2.45 per cent to Rs 372.40. HAL advanced 2.47 per cent to Rs 4,894.85.

Bharat Dynamics Ltd (BDL) was up 1.37 per cent at Rs 1,043.05. GRSE, Astra Microwave and Solar Industries gained up to 1.25 per cent each.

Kotak Institutional Equities said BEL has the widest multi-item exposure, while HAL is seen benefiting from two helicopter programmes. BDL is expected to gain from VSHORADS, Indian Air Force (IAF) weapons and the drone ecosystem.

Antique Stock Broking sees HAL and BEML as key beneficiaries of the DAC approval. Its top defence stock picks are HAL, Solar Industries India Ltd, BEL and Astra Microwave Products Ltd.

The domestic brokerage said India's defence sector is in a multi-year structural upcycle, driven by steady growth in budgeted capital expenditure over FY2026-30E, a rising number of Acceptance of Necessity (AoN) approvals and a push towards indigenisation.

"We remain constructive on the defence sector, supported by the expanding pipeline of acquisition programmes, increasing domestic sourcing and the government's continued focus on strengthening indigenous defence capabilities. However, faster conversion of AoNs into contracts remains critical for translating the sizeable procurement pipeline into sustained revenue and order-book growth."

In the near term, Antique expects several marquee defence orders to be placed, including the P75I submarine programme (estimated at Rs 90,000 crore), the QRSAM system (Rs 30,000 crore) and the Next-Generation Corvette (NGC) programme (Rs 33,000 crore). These orders are expected to be awarded to MDL, BEL and GRSE, respectively. Their execution is expected to create meaningful opportunities for ancillary defence companies. BDL, meanwhile, is likely to benefit from missile supplies worth Rs 10,000-12,000 crore for the QRSAM programme.