HAL, BEL, BDL to gain from India's ₹4 trn defence overhaul: InCred Equities

The brokerage has assigned an 'Add' rating to HAL and BEL, with target prices of ₹6,325 and ₹459, respectively, while Bharat Dynamics, Astra Microwave, and Data Patterns remain 'Not Rated.'

InCred Equities on India’s Defence Sector: Hindustan Aeronautics Ltd (HAL), Bharat Electronics Ltd (BEL), Bharat Dynamics Ltd (BDL), Astra Microwave and Data Patterns are set to emerge as key beneficiaries of India’s ₹4 trillion defence modernisation plan over the next decade, according to a report by InCred Equities dated September 17. 

 

InCred Equities has given HAL and BEL an ‘Add’ rating, with target prices of ₹6,325 and ₹459, respectively. Bharat Dynamics, Astra Microwave, and Data Patterns remain unrated. 

The investment, driven by the TPCR-2025 roadmap and the Sudarshan Chakra project, underscores the country’s shift toward electronics, cyber, and subsystem-level capabilities, marking a new phase in the domestic defence industry, analysts said.

 

Electronics and subsystems take centre stage

 

TPCR-2025 maps 457 defence programmes, more than double the 221 programmes under TPCR-2018. Nearly half (224 programmes) focus on cyber systems, electronics, and electronic warfare (EW), highlighting India’s pivot from traditional platform-centric procurement to networked, software-defined, and electronic capabilities. 

 

The plan includes over 60,000 software-defined radios, 7,000–8,000 S-band satellite terminals, dedicated EW suites, and AI-based command-and-control setups for roughly 4,000 users.

 

“Survivability, command-and-control, and lethality will increasingly be determined in the electronics and cyber domains,” the brokerage noted. TPCR-2025 also stressed upon subsystem-level work, with 86.9 per cent of programmes targeting components rather than complete platforms. This opens opportunities for component manufacturers, micro, small, and medium enterprises, and technology start-ups, creating a competitive domestic supply chain instead of concentrating value among a few large integrators.

 

Heavy investments in air and space defence

 

Analysts at InCred Equities identified a critical need for prioritised investment in air and space defence systems to close operational gaps across India’s two-front security geometry. 

 

Layered area-defence solutions, airborne warning and control systems (AWACS), high-altitude pseudo-satellites (HAPS), and long-endurance UAVs are expected to address radar-horizon blind spots. AESA radar upgrades, hardened distributed sensor-fusion, and automated command-and-control nodes are recommended to improve real-time decision-making and operational resilience.

 

Directed-energy weapons (DEWs) and integrated swarm-defence systems will also be essential to counter the threat of small unmanned aerial swarms and loitering munitions efficiently, reducing rapid depletion of munitions during sustained operations.

 

Sudarshan Chakra: A ₹4 trillion flagship programme

 

At the centre of this overhaul is the Sudarshan Chakra programme, expected to cost ₹4 trillion by 2035. The project covers layered area-defence systems like QRSAM, KUSHA, and Akash Prime; advanced sensing solutions including Voronezh OTH and Surya VHF radars; space-based sensors and HAPS payloads; directed-energy research; AESA upgrades; and hardened distributed sensor-fusion and command-and-control systems.

 

InCred Equities identifies HAL, BEL, BDL, Astra Microwave, and Data Patterns as primary beneficiaries of TPCR-2025’s electronics-focused push and the Sudarshan Chakra programme. “The future of Indian defence is digital, networked, and electronic. Companies leading in these domains stand to gain significantly,” the brokerage said.

 

By deepening domestic industrial capabilities, promoting indigenisation, and creating a tiered supplier ecosystem, analysts believe, the roadmap aims to balance innovation, reduce strategic risk, and strengthen India’s defence self-reliance over the next 15 years.