Amid order boost and slew of developments, ICICI Securities lists top defence picks; both private and PSUs on the list

In its report dated July 7, the domestic brokerage ICICI Securities has listed a host of defence stocks from both the private as well as public space which it likes based on an array of developments in June.

Before listing the stocks, we take you through the developments pointed out by the brokerage in its report:

HAL has been declared the winner of the bid for the ToT of ISRO’s small satellite launch vehicle. HAL has signed an agreement with France’s Safran Aircraft Engines for production of rotating parts for LEAP engines.

Solar Industries has successfully completed trials of its Rudrastra hybrid vertical takeoff and landing UAV.

BEL & Tata Electronics have signed an MoU to advance India's ambition for self-reliance in electronics & semiconductors.

Mazagon Dock Shipbuilders has acquired a controlling stake in Sri Lanka’s Colombo Dockyard in a USD 52mn deal.

MDSL and Hindustan Shipyard are set to finalise a MoU to jointly build submarines, making it the country's first ever dual-coast submarine production capability.

GRSE has partnered with Kongsberg Maritime of Norway to build an advanced polar research vessel for India.

GRSE has partnered with Sweden-based Berg Propulsion for local manufacturing of marine propulsion-related equipment and systems.

 GRSE has laid the keel of the 4th NG-OPV for the Indian Navy.

 Zen Technologies has acquired majority stake in TISA Aerospace Pvt. Ltd. Zen Technologies Secures Patent for Innovation in Laser-Based Combat Training.

PTC Industries has signed an MoU with Safran Aircraft Engines to jointly explore the manufacturing of components and materials for military aircraft engines.

 MoD has allocated INR 90bn for procurement by the Indian Army through the faster route of emergency procurement for capacity building and refilling exhausted ammunition stocks.

Indian Army has released RFI for procurement of 4,000 advanced top-attack anti-tank mines. Indian Army has released a request for information for procurement of 155mm precision-guided munitions for its howitzers.

Outlook for defence stocks

There has been large-scale approvals for emergency procurement and recently the MoD has approved EP or emergency procurement of INR 20bn for various platforms. Further, DAC has approved AoN for 10 proposals worth INR 1,050bn. . Going ahead, most of the companies under the brokerage’s coverage have guided for  over 15 per cent revenue growth in FY26; however, some companies like BDL, Solar Industries and Azad Engineering have guided for even higher growth rate of  around 25-30 per cent.

For FY26, the order inflow is expected to remain robust for companies under the brokerage's coverage, guidance from the companies include: i) BEL – expecting OI of INR 200- 250bn (ex- QRSAM order), ii) HAL – expecting OI of >INR 1trn which includes Su-30 upgrade, Tejas Mk-2 and RoH orders, iii) BDL is expecting OI of >INR 50bn across its product categories, iv) GRSE is expecting NG corvette order of INR 250bn apart from other vessels orders, v) Midhani is expecting OI of INR 12-13bn, vi) Zen is expecting OI of INR 8bn in H1FY26 and vii) Astra is expecting OI of INR 13-14bn.

Brokerage’s top picks in the defence space

The brokerage lists Solar Industries, Astra Microwave and Azad Engineering as our top picks in private space. Among defence PSUs, it prefers HAL, BEL and Midhani