Is PSU defence inventory BEL a brand new HAL on steroids? Defined

Amid a rally within the PSU shares, Indian defence PSU shares, Hindustan Aeronautics Ltd (HAL) and Bharat Electronics Ltd (BEL) delivered stellar returns to their respective shareholders. During the last 5 years, each defence PSUs have delivered returns of over 1,000% to their shareholders. Nonetheless, in 2025, the HAL share value has remained a perfect sell-on-rise inventory, whereas the BEL share value has ascended by over 40%.

This has triggered hypothesis about whether or not BEL shares are nonetheless in a bull development, and the federal government’s focus and rising expenditure on nationwide safety and defence will proceed to work as a catalyst for the BEL share value rally.

What’s fueling the BEL share value?

Highlighting the basics which might be fueling BEL’s share value, Seema Srivastava, Senior Analysis Analyst at SMC International Securities, mentioned, “BEL’s long-term journey is shaping into a powerful compounding story as the corporate evolves from a defence electronics provider right into a crucial pillar of India’s trendy warfare techniques. With an order ebook of ₹75,600 crore and clear visibility of ₹27,000 crore in FY26 inflows (probably ₹57,000 crore together with QRSAM), BEL enters a section of structural, not cyclical development. The corporate’s confidence in delivering 15% income development and sustaining EBITDA margins of 27% or extra underscores a uncommon stability in defence manufacturing. A number of upcoming programmes resembling QRSAM, LCA avionics, NGC radar orders, emergency procurements and strategic roles in Mission Kusha add layered, multi-year development triggers that may unfold sequentially past FY27.”

On why BEL share value outperformed HAL share value in 2025, Seema Srivastava of SMC International Securities mentioned, “In comparison with HAL, whose large ₹2.5 trillion order ebook is tied to massive and lumpy plane platforms, BEL advantages from shorter execution cycles and far broader product diversification throughout radars, digital warfare, missile electronics, communication techniques and command-control platforms. As India deepens defence indigenisation and shifts towards electronic-centric warfare, BEL’s positioning turns into even stronger.”

Evaluating the basics of HAL and BEL, Sachin Jasuja, Head of Equities and Founding Associate at Centricity WealthTech, mentioned, “As of October 2025, BEL’s order ebook is valued at roughly ₹74,000 crore, characterised by short-duration and recurring contracts. These contracts usually contain missile techniques, naval electronics, and digital warfare merchandise, permitting for quicker execution timelines and extra predictable income streams. In distinction, HAL has a bigger however longer-gestation order ebook of almost ₹1.89 trillion as of FY25. HAL’s tasks are capital-intensive and contain important reliance on imported engines just like the GE F414, regardless of ongoing efforts to reinforce indigenisation.”

HAL vs BEL: Which is healthier?

“Administration commentary from BEL’s current Q2 FY26 earnings underscores these shorter mission cycles, which allow faster order turnarounds, improved income visibility, and constant margin supply. BEL can also be actively pursuing export markets and rising indigenisation, which ought to assist robust order inflows and broaden its development alternatives. In the meantime, HAL’s aerospace packages, whereas important and large-scale, naturally contain longer growth durations and require heavier capital investments,” Jasuja added.

Sachin Jasuja said that BEL and HAL closely rely upon authorities orders, coverage continuity, and defence price range allocations, which characterize systemic dangers. Nonetheless, BEL’s lighter asset base and better income velocity structurally place it for quicker development. Though BEL at the moment instructions a valuation premium, its robust R&D pipeline, increasing product portfolio, and operational leverage justify this premium to a big extent.

Anticipating the development to proceed additional, Seema Srivastava mentioned, ” HAL will stay a scale big, however BEL provides a extra scalable and predictable compounding runway. With margin stability, increasing exports, rising R&D energy and a widening position in India’s strategic programmes, BEL share value has the potential to outperform HAL shares on proportion returns and emerge as a long-term multibagger within the defence house.”

Is BEL subsequent HAL on steroids?

On whether or not BEL is subsequent HAL on steroids, Sachin Jasuja mentioned, “It might be considerably exaggerated to label BEL because the ‘subsequent HAL on steroids,’ provided that each corporations function in distinct but complementary niches inside the Indian defence ecosystem, BEL already instructions a ₹3 lakh crore market cap with barely wealthy valuations and a bigger base. Even so, BEL’s efficient execution, short-cycle order ebook, and strategic give attention to technology-intensive defence electronics proceed to make it enticing as a possible development candidate, particularly as its export ambitions achieve traction amid a altering geopolitical setting that’s driving rising defence spending throughout most international locations.”