India is recognised as one of many world’s strongest navy forces and holds vital strategic worth for its authorities. Inside the Indian defence sector, the three largest market segments are navy fixed-wing plane, naval vessels and floor combatants, and missile and missile defence programs. Main the nation’s defence manufacturing efforts are outstanding public-sector corporations comparable to Bharat Electronics Ltd. (BEL) and Hindustan Aeronautics Restricted (HAL).
For FY26, the Ministry of Defence (MoD) allotted a complete price range of Rs. 6.81 lakh crore — a 9.5 p.c improve in comparison with the earlier 12 months price range. Out of this, Rs. 1.80 lakh crore has been earmarked for capex, overlaying the acquisition of recent weapons, plane, warships, and different key navy tools. Trying forward, the federal government goals to spice up home defence manufacturing to just about $34.7 billion by FY29.
On the export entrance, India surpassed Rs. 21,000 crore in defence exports in CY24 and is now concentrating on Rs. 50,000 crore by 2029. Over the subsequent 5 years, India plans to export navy {hardware} value round Rs. 35,000 crore.
Right here’s a comparability between the railway shares of Hindustan Aeronautics Restricted and Bharat Electronics Restricted to supply a transparent overview of each corporations:
Value Motion
Shares of Hindustan Aeronautics, with a market cap of Rs. 3.32 lakh crores, closed within the inexperienced at Rs. 4,971.95 on BSE, up by round 1.5 p.c on Friday. The inventory has delivered damaging returns of almost 6 p.c over a one-year interval, however gained over 2 p.c within the final one month. With a market cap of Rs. 2.98 lakh crores, shares of Bharat Electronics closed within the inexperienced at Rs. 408.05 on BSE, up by round 2.4 p.c. The inventory has delivered optimistic returns of almost 31 p.c over a one-year interval, and gained over 12 p.c within the final one month.
Enterprise Segments
Hindustan Aeronautics Ltd. (HAL) provides a various vary of services and products throughout a number of segments. Within the plane class, its portfolio consists of platforms just like the Gentle Fight Plane (LCA), HTT-40 coach, Dornier, Intermediate Jet Coach (IJT), SU-30 MKI, and HAWK. For civil aviation, HAL produces fashions such because the Dhruv Superior Gentle Helicopter (ALH) and the Hindustan-228.
Within the Helicopters class, HAL provides Dhruv, Rudra, Gentle Fight Helicopter (LCH), Gentle Utility Helicopter (LUH), and legacy fashions together with Cheetal, Lancer, Chetak, and Cheetah. Within the house phase, the corporate contributes to vital parts like warmth protect assemblies, nostril cone assemblies, tanks, and shrouds. The Programs phase types one other essential a part of HAL’s operations, overlaying avionics, equipment, supplies, and upkeep, restore, and overhaul (MRO) companies.
Within the Defence phase, BEL’s core focus lies in growing superior electronics tools, programs, and companies for the Indian defence sector. Its defence choices embody radar and hearth management programs, weapon programs, communication, network-centric programs (C4I), digital warfare programs, avionics, anti-submarine warfare programs & sonars, electro-optics, tank electronics, gun upgrades, strategic parts, arms & ammunitions, seekers & missiles, community & cyber safety.
Within the non-defence phase, BEL supplies a variety of applied sciences and companies comparable to homeland safety and good metropolis options, cybersecurity, digital voting machines (EVMs) and VVPATs, software program and IT companies, healthcare and medical electronics, civil aviation programs, photo voltaic cells/railway/metro/airport options, house electronics, and safe communications.
Order E-book
As of FY25, HAL reported an order e book of Rs. 1,89,300 crore, greater than double the Rs. 94,127 crore recorded in FY24, regardless of attaining a turnover of Rs. 30,105 crore in the course of the 12 months.
Trying forward, HAL anticipates additional orders value roughly Rs. 1 lakh crore over the subsequent one to 2 years, together with 97 LCA Mk1A fighter jets, 143 Superior Gentle Helicopters (ALH) for the Indian Air Drive and Military and extra. One other Rs. 20,000 crore in ROH contracts can be anticipated to be added to the pipeline. In distinction, BEL reported an order e book of Rs. 71,650 crore as of 1st April 2025, backed by an order influx of Rs. 18,000 crore.
One other key alternative lies within the Subsequent-Era Corvette (NGC) program, the place BEL is predicted to produce almost all digital programs. The NGC contracts may very well be value between Rs. 6,000 and Rs. 10,000 crore, spanning two shipyards and involving 10-12 subsystems per vessel.
Progress Steerage
HAL has offered a income development steering of 8-10 p.c for FY26, although administration believes there’s potential to cross into double-digit development as undertaking execution picks up tempo. From FY27 onwards, HAL expects constant double-digit development as execution ramps up. Within the medium time period, the corporate goals to maintain this double-digit development trajectory.
On the profitability entrance, HAL is concentrating on an EBITDA margin (together with different earnings) of 38-39 p.c, with core operational EBITDA at round 31 p.c, and expects to keep up these ranges over the medium time period.
BEL is projecting ~15 p.c income development for FY26, with an anticipated EBITDA margin of round 27 p.c. The corporate goals for order inflows exceeding Rs. 27,000 crore, excluding the big QRSAM tender, and plans to take a position about Rs. 1,600 crore in R&D and over Rs. 1,000 crore in capex. The income break up is predicted to stay closely skewed towards defence, with a 90:10 ratio between defence and non-defence segments.
BEL additionally has an export goal of $120 million for FY26, aiming for over 15 p.c development. As a part of its long-term technique, BEL plans to keep up an annual capex of greater than Rs. 1,000 crore, together with the organising of recent manufacturing amenities at key areas throughout India, a few of that are anticipated to surpass the dimensions of its present crops.
Trying on the subsequent 5 years, BEL is concentrating on a income CAGR of 15-17.5 p.c (with a objective to the touch 20 p.c), and internet revenue is projected to develop at over 20 p.c, fuelled by sturdy in-house R&D and a push for higher indigenisation.
Monetary Efficiency
In This fall FY25, HAL reported a marginal decline in income from operations by almost 7 p.c to Rs. 13,700 crores, whereas its internet revenue additionally decreased round 8 p.c YoY to Rs. 3,977 crores.
Moreover, the corporate’s income elevated by a 3-year CAGR of almost 8 p.c to Rs. 30,981 crores in FY25, as towards Rs. 24,620 crores in FY22, whereas the online revenue grew by a CAGR of 18 p.c, from Rs. 5,080 crores to Rs. 8,364 crores, over the identical interval.
In distinction, BEL reported a marginal rise in income from operations by almost 7 p.c to Rs. 9,150 crores in This fall FY25, whereas its internet revenue additionally elevated by round 18 p.c YoY to Rs. 2,127 crores.
Additional, the income of Bharat Electronics elevated by a 3-year CAGR of almost 15.65 p.c to Rs. 23,769 crores in FY25, as towards Rs. 15,368 crores in FY22, whereas the online revenue grew by a CAGR of over 30 p.c, from Rs. 2,400 crores to Rs. 5,323 crores, over the identical interval.
Written by Shivani Singh
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