Defence PSU Stock Analysis: HAL, BEL, BDL, Mazagon Dock

Here’s a consolidated analysis to help you pick the best defence PSU stock for strong gains:

Key Takeaways:

HAL (Hindustan Aeronautics Ltd) – Top Pick

• Jefferies is bullish on HAL, citing strong upside potential due to:
• LCA Tejas Mk1A fighter jet deliveries (83 aircraft order worth ₹48,000 crore).
• GE engine deal finalization (99 F414 engines to be delivered by March 2026, ending a 2-year delay).
• Rising defence exports (potential orders from Philippines, Argentina, Egypt).
• Order book at ~₹94,000 crore (3.5x FY24 revenue).
• RoE at 23%, strong margins (~22-24%).

BEL (Bharat Electronics Ltd) – Safe & Steady

• Largest order book (₹76,000 crore) among defence PSUs.
• Strong in radars, electronic warfare, and naval systems.
• Dividend yield of ~2%, consistent performer.

BDL (Bharat Dynamics Ltd) – Missile Play

• RoE of 24%, better than BEL & HAL.
• Key player in Akash, Astra, and BrahMos missiles.
• Order book at ₹20,000+ crore, but smaller than HAL/BEL.

Mazagon Dock – High RoE but Limited Growth

• Highest RoE (40%), but order inflow slower than HAL/BEL.
• Focus on submarines & warships, but less diversified.

Which Stock is Best to Buy?

Stock	RoE (%)	Order Book (₹ Cr)	Key Catalyst	Risk
HAL	23%	~94,000	Tejas Mk1A, Engine Deal, Exports	High Valuation
BEL	19%	~76,000	Steady growth, Govt orders	Slower upside
BDL	24%	~20,000	Missile demand	Smaller scale
Mazagon	40%	NA	Shipbuilding	Limited orders

Final Recommendation:

Best for Aggressive Growth – HAL

• Near-term trigger: GE engine deliveries & Tejas Mk1A rollout.
• Long-term potential: Defence exports, AMCA project.
• Risk: Expensive (~40x P/E), but justified by growth.

Best for Stability + Dividends – BEL

• Lower volatility, strong order book.
• Good for conservative investors.

Best for Value – BDL

• Undervalued compared to HAL/BEL, high RoE.
• Best if you believe in missile demand growth.

Mazagon Dock – Only for RoE Play

• High profitability but limited upside vs. HAL/BDL.

Verdict: HAL is the Best Bet for Strong Gains

• Short-term: Likely to rise on Tejas & engine news.
• Long-term: Defence exports & next-gen fighter projects will drive growth.
• Alternative: If HAL is too expensive, BDL offers a good risk-reward balance.

Would you like a technical analysis or price targets for these stocks?