HAL to Bharat Forge: Which defence stock has highest upside after Q4 results? Check brokerages’ top 5 picks

Defence Stocks: Brokerages remained largely positive on defence and industrial stocks after the March quarter earnings season, with several firms raising target prices on companies such as Solar Industries India, Hindustan Aeronautics, Data Patterns, Bharat Electronics and Bharat Forge.

Most analysts cited strong execution, healthy order books and improving defence manufacturing opportunities as key long-term growth drivers. However, some brokerages also flagged concerns around delays in deliveries, margins and valuations.

Solar Industries Share Price Targets

Shares of Solar Industries India were trading at Rs 18,158 on May 20.

Goldman Sachs maintained its ‘Buy’ rating on the stock and raised the target price to Rs 19,590 from Rs 18,900. The revised target implies an upside of around 8 per cent from the current market price.

The brokerage said the company’s Q4FY26 performance surpassed estimates and added that robust guidance is likely to remain the key catalyst for stock performance going ahead.

However, Goldman Sachs also warned that revenue growth in FY28 could be impacted by a possible cooling-off in ammonium nitrate demand.

HAL Share Price Targets

Shares of Hindustan Aeronautics were trading at Rs 4,292.

Jefferies maintained a ‘Buy’ call and raised the target price to Rs 6,300 from Rs 6,220, indicating a potential upside of nearly 47 per cent. The brokerage said execution should drive further gains and expects the stock to move higher as deliveries of Tejas Mk1A aircraft pick up over the next three months.

JP Morgan retained its ‘Overweight’ rating but cut the target price to Rs 5,145 from Rs 6,004. Even after the reduction, the target suggests an upside of about 20 per cent. The brokerage said delays in LCA deliveries remain an overhang, but added that valuations remain attractive considering HAL’s large order book and high return ratios.

Goldman Sachs maintained a ‘Neutral’ stance and raised the target to Rs 5,545 from Rs 5,225, implying an upside of around 29 per cent.

CLSA also maintained its positive stance with an ‘Accumulate’ rating and raised the target to Rs 5,265 from Rs 5,175. The brokerage said HAL’s profit after tax was ahead of expectations due to engine and helicopter deliveries, along with treasury income. It added that the company’s cash pile rose 21 per cent year-on-year to $4.9 billion.

UBS remained the most bearish among global brokerages. It maintained a ‘Sell’ rating with a target price of Rs 3,200, implying a downside of around 25 per cent. UBS flagged concerns over execution challenges and delays in Tejas deliveries.

Data Patterns Share Price Targets

Shares of Data Patterns were trading at Rs 3,808.80.

Jefferies maintained its ‘Buy’ rating and sharply raised the target price to Rs 4,500 from Rs 3,710. The revised target implies an upside of around 18 per cent.

The brokerage said the March quarter EBITDA was 13 per cent above estimates due to a sharp margin surprise. It also highlighted that the company increased its medium-term order pipeline guidance to Rs 20,000-40,000 crore from Rs 20,000-30,000 crore earlier.

Goldman Sachs also maintained a ‘Buy’ call and raised the target to Rs 4,165 from Rs 3,650, indicating an upside of nearly 9 per cent. The brokerage cited a robust earnings outlook and export potential due to the company’s vertically integrated business model.

Bharat Forge Share Price Targets

Shares of Bharat Forge were trading at Rs 1,877.40.

Jefferies maintained its ‘Buy’ rating and raised the target price to Rs 2,500 from Rs 2,150. The target indicates an upside of around 33 per cent.

Morgan Stanley maintained its ‘Overweight’ stance and increased the target to Rs 2,233 from Rs 1,978, implying an upside of about 19 per cent. The brokerage said the company expects 25 per cent revenue growth in FY27 and highlighted aerospace and defence as key growth areas.

JP Morgan retained a ‘Neutral’ rating and raised the target price to Rs 1,735 from Rs 1,630. The target suggests a downside of around 8 per cent from current levels.

Citi remained bearish on the stock with a ‘Sell’ call and raised the target price to Rs 1,060 from Rs 970. The revised target still implies a sharp downside of around 44 per cent. Citi said defence orders have been delayed in the past and added that it would wait for stronger revenue recognition before turning more constructive on the stock.

BEL Share Price Targets

Shares of Bharat Electronics were trading at Rs 411.4.

Nomura maintained a ‘Neutral’ rating with a target price of Rs 454, implying an upside of around 10 per cent.

The brokerage said BEL delivered a steady operational performance in the March quarter, largely in line with expectations. It added that management commentary on FY27 guidance, order inflow momentum and margin trajectory would remain key monitorables.

Nomura also noted that the stock is currently trading at 45 times FY27 estimated earnings.