Defence stocks have captured investor attention following a positive outlook from Choice Institutional Equities, which reiterated buy ratings for Hindustan Aeronautics, Bharat Electronics, and Zen Technologies. This favorable assessment is attributed to strong order inflows, healthy execution pipelines, and improving domestic manufacturing capabilities.
According to the brokerage, the sector is benefiting from increasing military modernization, heightened localization efforts, export opportunities, and sustained government spending. Companies engaged in aerospace, radars, electronic warfare, and anti-drone systems are witnessing significant demand visibility.
Choice Institutional Equities maintained a buy rating on Hindustan Aeronautics, setting a target price of ₹5,050, compared to the current market price of ₹4,304. The brokerage noted the company’s record order book of ₹2.54 lakh crore and anticipates additional orders of around ₹90,000 crore over the next two years. It projects a 12.3 percent year-over-year revenue growth for FY27, with EBITDA margins expected to remain between 30-31 percent.
Bharat Electronics also received a buy rating, with a target price of ₹500 against its current market price of ₹411. The brokerage forecasts over ₹55,000 crore in order inflows in FY27. Choice Institutional Equities also noted that Bharat Electronics stands to benefit from initiatives like QRSAM and Project 75I submarines. The company is expected to achieve a revenue growth of 17.1 percent year-over-year in FY27, with EBITDA margins above 30 percent.
Zen Technologies garnered a buy rating, with a target price of ₹1,850, compared to its current price of ₹1,665. The brokerage highlighted Zen’s strengthening position in anti-drone systems, simulators, and autonomous defence technologies, supported by an order book of ₹1,336 crore and a cumulative revenue guidance of ₹4,000 crore for FY27 and FY28.
Additionally, Choice Institutional Equities maintained an add rating on Data Patterns, setting a target price of ₹4,060 versus its current market price of ₹4,043. The brokerage cited strong traction in programmes like BrahMos seekers and electronic warfare systems, along with a 216 percent year-over-year increase in order inflows for FY26. The company reported a 30.6 percent year-over-year revenue growth in FY26 and anticipates EBITDA margins between 38-40 percent.
Apollo Micro Systems also received an add rating, with a target price of ₹365 against a current market price of ₹409. The brokerage emphasized Apollo’s ₹1,432 crore order book and expansion into missiles, UAVs, and directed energy weapons, projecting a revenue growth of 59.5 percent year-over-year in FY27.
Choice Institutional Equities assigned a target price of ₹3,300 to Cyient DLM, which has a current market price of ₹3,484. The brokerage highlighted the company’s renewed focus on domestic operations following a restructuring of its overseas businesses, expecting a medium-term standalone revenue CAGR of 25-30 percent.
In contrast, Azad Engineering and Astra Microwave Products received reduce ratings due to valuation concerns following substantial stock rallies. For Azad Engineering, the target price was set at ₹1,900 against a current market price of ₹2,017, despite a ₹6,500 crore rolling order book and guidance for over 25 percent revenue growth in FY27. Astra Microwave Products faced a similar reduce rating, with a target price of ₹1,300. The brokerage acknowledged the company’s strong prospects in radar and electronic warfare programs but cautioned that current valuations limit near-term upside potential. Astra expects a revenue growth of 15-20 percent year-over-year in FY27, aiming to triple revenue over the next five years.
Published on May 31, 2026.
