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Defence Sector: PSUs reported provisional revenue numbers for FY26; Export numbers

ICICIdirect Research 03 Apr 2026 DISCLAIMER

Bharat Electronics (BEL) reported revenue growth of ~16% YoY for FY26; which is largely in line with expectations and management’s guidance. The company’s overall execution remains steady with healthy order intake during the year (₹ 30,000 crore). Order backlog stands strong at ~₹ 74,000 crore (2.7x FY26 revenue). FY27E order inflows are expected to surpass Rs 50000 crore considering that the large QRSAM contract (₹ 30,000 crore) is likely to be concluded in Q1FY27E. We have a Buy rating on BEL with a target price of ₹ 530
Hindustan Aeronautics (HAL) reported revenue of ~₹32,250 crore for FY26, registering 4.1% YoY growth. The implied Q4FY26 revenue stands at ~₹13,103 crore, reflecting a de-growth of 4.4% YoY, primarily due to delays in LCA Mk1A deliveries amid supply chain constraints. However, company's execution is expected to pick-up sharply from FY27E, led by expected ramp-up in engines supply from GE. Management also said GE has delivered 5 engines till now and is set to deliver 20 engines annually from this year.  Other platforms and MRO contracts are already witnessing better execution. Order book as of March is at ~₹2.54 lakh crore (~7.9x FY26 revenue), providing strong long-term visibility. With capacity augmentation, improving supply chain visibility and strong pipeline across aircraft, helicopters and engines, the company remains well positioned for sustained growth over the medium term. We have a Buy rating on HAL with a target price of ₹ 4960
Mishra Dhatu Nigam (Midhani) reported revenue of ~₹1,206 crore for FY26, registering 12.3% YoY growth, driven by better execution this year as compared to FY25. The implied Q4FY26 revenue stands at ~₹ 550 crore, reflecting strong growth of 34% YoY (+51% QoQ). With an order book of ~₹2,600 crore (2.1x FY26 revenue) and increasing transition towards value-added products, the company is better positioned to improve execution going forward. Management has guided ~20% revenue growth for both FY27 and FY28E. We have a Buy rating on Midhani with a target price of ₹ 425
Garden Reach Shipbuilders & Engineers (GRSE) has reported revenue of ~₹6,400 crore in FY26 (+26% YoY), as the execution remained healthy and came in-line with management’s guidance of 25-30%. Current order backlog is estimated at ~₹17,000 crore (2.6x TTM revenue) with the final phases of P-17A frigates and ASW-SWC contracts (~70% of the order book) expected to drive near-term revenues. However, timely award and execution of projects in the pipeline (including next-generation corvettes, patrol vessels, and additional survey ships) will be critical to sustaining the strong growth trajectory beyond FY27E. We have a Hold rating on GRSE with a target price of ₹ 2670
Defence exports surged by 63% YoY to ₹ 38,484 crore in FY26, mainly led by a sharp jump in exports from PSUs (+151% YoY). PSUs share in total exports has increased to 55% in FY26 (from 36% in FY25) while private players share has come down to 45% (from 64% in FY25). Exports are now ~3x over the last five years, with India supplying to 80+ countries. Govt targets total exports of Rs 50000 crore by FY29

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