Nomura bullish on defense sector, gives HAL, BEL 'buy' tag

Hindustan Aeronautics stock has gained around 170 percent over the past year.

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26 Aug, 2025 12:21

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Nomura initiated coverage on Hindustan Aeronautics and Bharat Electronic with a buy rating, as the international brokerage is bullish on the defense space.

Nomura foresees a $138 billion opportunity on the defense sector over FY24 to FY32. The brokerage agreed that there could be further legs in the upcycle, as the government is following through on all defense-related policies.

Nomura stated that the country's defense sector is in a good position to meet the future needs of the armed forces. They noted the government's increasing procurement from local companies, which has brought more attention to the industry.

At 9.20 am, BEL shares were quoting Rs 237.9 per share on the NSE, higher by 2.7 percent. Hindustan Aeronautics stock price advanced 2.5 percent to Rs 3,954 apiece.

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The brokerage issued a target price of Rs 4,750 on HAL, indicating an upside of around 23 percent. HAL's strong moat in the fighter aircraft and helicopter space

HAL's significant capability upgrade provides the basis for developing its indigenous engine program. Hindustan Aeronautics also has a case for further re-rating.

Nomura also initiated coverage on BEL with a buy rating with a Rs 300 price target, which implied an upside of 30 percent. The counter's premium valuations are likely to be sustained.

BEL's increased visibility on order inflows gives Nomura conviction on margin delivery and expansion in return ratios.

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