Motilal Oswal picks 4 defence stocks with upside potential of up to 36% after DAC’s Rs 79,000 cr clearance

Domestic brokerage firm Motilal Oswal Financial Services has expressed a bullish outlook on select defence sector stocks following the Defence Acquisition Council’s (DAC) recent approval of capital acquisition proposals worth Rs 79,000 crore.

Following this, the brokerage maintains a positive stance on select defence stocks like Bharat Electronics (BEL), Hindustan Aeronautics (HAL), and two other listed players: Bharat Dynamics (BDL) and Astra Microwave Products (AMPL), highlighting their potential to benefit from the defence procurement pipeline.

The capital proposals, approved in the winter session, have pushed the FY26 year-to-date approvals to Rs 3.3 trillion, nearly twice the annual defence capital outlay of Rs 1.8 trillion. These approvals span a wide range of defence capabilities, including munitions, missile systems, air defence, surveillance, training modules, and naval platforms.


While Motilal Oswal noted that Acceptance of Necessity (AoN) approvals does not equate to immediate orders, the scale and scope of these clearances are expected to de-risk future order inflows for public sector defence undertakings and select private sector participants over the next two to four years.

Motilal Oswal’s target price for defence stocks

The brokerage has set the following target prices for its top defence picks:

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

Further, Motilal Oswal has also maintained a neutral stance on Zen Technologies, assigning it a target price of Rs 1,400 against its current price of Rs 1,386, indicating a modest upside potential of 1% for the stock.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)