Defence stocks sell-off: Bharat Dynamics falls 9% but ICICI Securities says ‘buy’ with three other shares

Shares of defence companies such as Bharat Dynamics Ltd., Hindustan Aeronautics Ltd., Bharat Electronics Ltd., Paras Defence and Space Technologies Ltd., Mazagon Dock Shipbuilders Ltd., and Garden Reach Shipbuilders Ltd. extended losses in Monday’s session, with stocks falling by up to 7%. Among these, BEL was the top loser on the Nifty 50 index.

Brokerage firm ICICI Securities has shared its top picks, saying that it continues to favor Solar Industries with a ‘Buy’ rating and a price target of ₹13,250.

The brokerage also has ‘Buy’ ratings on BEL and BDL, with price targets of ₹350 and ₹1,400, respectively.In the aerospace sector, it likes HAL and has given it an ‘Add’ rating with a price target of ₹4,660 per share.

Stock	Rating	Price Target	Potential Upside
HAL	Add	₹4,660	17.5%
BEL	Buy	₹350	19%
BDL	Buy	₹1,400	7%
Solar Industries	Buy	₹13,250	30%

In its note on the defence sector post-Budget 2025, ICICI Securities said that spending is likely to accelerate. The capital outlay on defence services in the FY26 Budget Estimate stands at ₹1.8 lakh crore, reflecting a 12.9% year-on-year rise, compared to the FY25 revised estimate, and a 4.7% year-on-year increase, compared to the FY25 Budget Estimate.

Key points from the brokerage’s report—

– A shortfall of ₹11,800 crore is likely compared to the FY25 BE, possibly due to lower ordering or execution delays at DPSUs in FY25.

– The outlay for other equipment has increased by 35.4% YoY compared to the FY25 RE, mainly due to a significant shortfall in FY25.

– The increase in outlay for aircraft and aero engines is likely due to the possible ordering of Rafale-M aircraft.

– The budget for the naval fleet remains static.

– Allocation to DRDO and technology development for the Air Force has increased significantly compared to the FY25 RE.