HAL shares surged over 6% to hit the day's high of ₹4,910 on the BSE on Thursday, as investors cheered the company's robust order book and positive outlook for the coming quarters. According to the company's annual report released on Tuesday, HAL's order book stood at a staggering ₹2.55 lakh crore for FY26, offering 7-8 years of revenue visibility. The defence major expects growth to accelerate through supply chain stabilisation, capacity expansion, infrastructure investments, and faster production ramp-up of key platforms, supporting its long-term growth outlook. As per ETMarkets, the outlook for FY27 and beyond remains positive, with the company noting that its strong order book provides 7-8 years of revenue visibility.
According to reports from NDTV Profit, ICICI Securities has identified Hindustan Aeronautics Limited (HAL) and Solar Industries as top defence sector picks. The brokerage maintains a structurally positive stance on the Indian defence sector, citing government policies that remain firmly supportive of the industry's growth trajectory. ICICI Securities has also issued 'Add' ratings on Bharat Dynamics Ltd (BDL), Bharat Electronics Ltd (BEL) and Azad Engineering Ltd, expanding its defence stock recommendations beyond the initial two picks.
As reported by NDTV Profit, the Defence Acquisition Council (DAC) approvals reached an all-time high of ₹52,000 crore in FY26, with continued momentum in Q1 FY27. This record approval level is expected to drive increased order awarding momentum in FY27/28, particularly in aerospace, missiles, electronic warfare and drone defence/offence sectors. The fabric of warfare has changed significantly in recent years, creating new opportunities for defence manufacturers, with ICICI Securities expecting the order awarding momentum to pick up in FY27/28 as the fabric of warfare has changed in the past couple of years.
According to the ICICI Securities report, the Ministry of Defence has established a ₹3 trillion annual capital outlay target by CY29, implying sustained double-digit CAGR in defence capital expenditure. The recent Defence Procurement Manual 2025 is expected to significantly compress acquisition timelines, further accelerating the sector's growth trajectory. With this government support, along with the recent Defence Procurement Manual 2025, acquisition timelines are expected to be significantly compressed, accelerating the sector's growth trajectory.
As reported by NDTV Profit, Indian Original Equipment Manufacturers with established export track records or Memorandums of Understanding are likely to benefit disproportionately, especially in missiles, drones, aerospace, defence electronics and radars. The geopolitical backdrop continues to provide structural tailwinds, with the conflict in the Middle East reinforcing defence budget urgency across GCC countries. HAL recently announced a long-term agreement with Safran Aircraft Engines for the production and supply of turbine ring forgings made from superalloys for the 'CFM LEAP' engine programme. Under the agreement, HAL will manufacture near-net-shape ring forgings for the Leading Edge Aviation Propulsion (LEAP) engine at its state-of-the-art Ring Rolling facility at HAL's Foundry and Forge Division in Bengaluru, with these superalloy ring forgings used in high-temperature applications in the rotating section of the aero-engine and critical to engine performance and reliability.
According to the ICICI Securities report, the Navy may receive the long-awaited ₹70,000 crore submarine orders soon, adding to the sector's growth prospects. This substantial naval procurement is expected to further strengthen the defence sector's order book and provide sustained revenue visibility for major defence manufacturers.
