BEL, HAL, GRSE among 5 defence stocks to buy ahead of Budget 2026: Analysts

Defence related stocks have rallied up to 5% this year. Sachin Gupta of Choice Broking believes that there is pre-Budget optimism, and projects up to 12% upside in 5 shares based on technical charts.

Defence stocks have rallied up to 5 per cent in early days of 2026 in anticipation of a higher defence allocation in the Budget 2026.  Among individual stocks - Bharat Dynamics (BDL), Solar Industries and MTAR Technologies led the up move with gains of around 5 per cent each. That apart, Bharat Electronics (BEL), Hindustan Aeronautics (HAL), Garden Reach Shipbuilders & Engineers (GRSE), Data Patterns (India), Astra Microwave Products and Paras Defence and Space Technologies gained 1 - 3 per cent.  "The rally in defence stocks reflects pre-Budget optimism around strong order books, improved execution, and the government's on-going push for defence indigenisation and exports," says Sachin Gupta, VP – Research at Choice Equity Broking.  The Nifty Defence index has outperformed so far in January - up 2.3 per cent as against a mere 0.2 gain on the Nifty 50 index.  While valuations in parts of the sector have turned rich after the recent run-up, the analyst expects that the medium-term outlook to remain positive, backed by India's defence modernisation and long-term growth visibility.  In FY26 thus far, the Indian government inked contracts worth ₹1.82 trillion to acquire weapons and equipment for the armed forces.  This puts the Ministry of Defence (MoD) on track to match - or potentially exceed - the record ₹2.1 trillion worth of contracts inked in FY25, and strengthens the case for higher defence allocation in the upcoming Union Budget 2026. READ MORE  Amid the optimism, Sachin Gupta of Choice Equity Broking projects up to 12 per cent upside in defence shares such as - BEL, HAL, BDL, GRSE and MTAR Technologies - based on technical analysis.  Here's a detailed look at these 5 defence stock charts: 

MTAR Technologies

Current Market Price: ₹2,550 

 

 

  Gupta highlights that MTAR Technologies stock is forming a higher high–higher low structure and has broken out with strong buying interest, while momentum remains supportive with RSI near 61.  The analyst sees support for the stock at ₹2,430, with potential up move towards ₹2,840 - this implies an upside potential of 11.4 per cent. 

Garden Reach Shipbuilders & Engineers (GRSE)

Current Market Price: ₹2,485 

 

  GRSE has staged a strong rebound since mid-December after forming a low near ₹2,168, gaining over 15 per cent in the last 12 trading sessions.  "The stock is now trading above its 200-day exponential moving average (EMA), supported by healthy volumes, while the RSI has indicated a positive crossover, signalling improving momentum," says Gupta.  The analyst recommends a buy on dips (₹2,500–2,470 range), with a key support at ₹2,300 for likely 10-12 per cent returns. 

Bharat Dynamics (BDL)

Current Market Price: ₹1,535 

 

  BDL stock has broken out of a falling trendline and is trading above its 200-EMA, signalling a strong bullish setup, notes Gupta.  The stock can target ₹1,685 on the upside (9.8% likely gain), while the analyst recommends a stop loss at ₹1470. 

Bharat Electronics (BEL)

Current Market Price: ₹413 

 

  BEL has moved decisively above its 100-(EMA), signalling a positive shift in the intermediate trend, explains the analyst from Choice Equity Broking.  Gupta recommends buy on dips strategy in BEL around ₹400 - ₹405 with the stop loss of ₹388 for an upside target of ₹420 and ₹435 levels. 

HAL

Current Market Price: ₹4,516 

 

  HAL has moved decisively above its 50-day EMA, supported by rising volumes, which highlights renewed buying interest among traders.  On the downside, the stock has strong support around ₹4,350 making a buy-on-dips strategy favourable in the short-term. Overall, the stock can potentially deliver 8–12 per cent returns, said the analyst.  Disclaimer: The views expressed by the brokerage/ analyst in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.