Motilal Oswal picks top defence stocks: Rs 79,000 crore DAC approvals boost outlook; here's all you need to know

Buoyed by a major push in defence spending, domestic brokerage Motilal Oswal Financial Services has turned bullish on select defence stocks after the Defence Acquisition Council (DAC) cleared capital acquisition proposals worth Rs 79,000 crore.

Following the approvals, the brokerage reiterated a positive outlook on key defence names such as Bharat Electronics (BEL) and Hindustan Aeronautics (HAL), along with Bharat Dynamics (BDL) and Astra Microwave Products (AMPL), citing their strong positioning to benefit from the expanding defence procurement pipeline.

The approvals, cleared during the winter session, have pushed FY26 year-to-date defence capital approvals to Rs 3.3 trillion, nearly double the annual defence capital outlay of Rs 1.8 trillion, ET reported.

The proposals cover a broad range of capabilities, including munitions, missile systems, air defence, surveillance, training systems and naval platforms.

Motilal Oswal cautioned that Acceptance of Necessity (AoN) approvals do not translate into immediate orders. However, it said the scale and breadth of the clearances are expected to de-risk future order inflows for public sector defence firms and select private players over the next two to four years.

According to ET, Motilal Oswal has outlined optimistic target prices for its preferred defence stocks, indicating healthy upside potential from current levels.

Bharat Electronics (BEL) has been assigned a target of Rs 500, implying an upside of 27.2% from its current market price of Rs 393.

• BEL: Rs 500 (CMP: Rs 393) | Upside: 27.2%
• HAL: Rs 5,800 (CMP: Rs 4,377) | Upside: 32.5%
• BDL: Rs 2,000 (CMP: Rs 1,473) | Upside: 35.8%
• AMPL: Rs 1,100 (CMP: Rs 979) | Upside: 12.35%

The brokerage has also maintained a neutral view on Zen Technologies, assigning a target price of Rs 1,400 against a current price of Rs 1,386, indicating a limited upside of about 1%.

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