Synopsis:
India’s defence sector is rapidly expanding, and companies such as BEL, HAL, Paras Defence, Mishra Dhatu Nigam Ltd and GRSE with high Piotroski scores demonstrate strong financial health and growth, making them appealing to investors.
India’s defence sector has expanded rapidly in recent years. This expansion is primarily driven by increased government spending on domestic manufacturing, supportive policies, and rising defence exports. With global tensions and India’s push for self-reliance, defence companies have become more appealing to investors. However, because stock prices in this sector can skyrocket due to market excitement, it is critical to focus on companies that are not only benefiting from demand but are also financially sound.
What is the Piotroski Score and why is it important?
The Piotroski Score (also known as the Piotroski F-Score) is a financial strength indicator developed by Stanford University professor Joseph Piotroski. It rates companies on a scale of 0 to 9, based on nine accounting-related factors. These criteria are divided into three groups: profitability, leverage/liquidity, and operational efficiency. A higher score, usually between 7 and 9, indicates strong fundamentals, whereas a lower score of 0 to 3 indicates financial weakness.
Investors can use the Piotroski Score to distinguish between high-quality companies and low-quality ones. In defence, this is especially important because these companies rely on long-term contracts, require a strong financial foundation, and must operate efficiently in order to grow consistently.
Below are list of defence stock with high piotroski score
Bharat Electronics Ltd
Bharat Electronics Limited (BEL), a Navratna PSU under the Ministry of Defence, is a leading provider of advanced electronic systems for the Army, Navy, and Air Force. Beyond defence, the company has expanded its presence into areas such as homeland security, smart city projects, space electronics, energy solutions, telecommunications, cyber security, medical electronics, and software services.
Bharat Electronics Ltd has a market value of Rs. 2,68,268.88 crore and is closed at Rs. 367 on Tuesday. The company’s P/E stands at 48.6x, which is lower than the industry P/E of 66.6x. The ROCE of 38.9 percent, and ROE of 29.2 percent, indicates the company’s strong financial position.
Bharat Electronics Ltd has a piotroski score of 8, and in Q1FY26, the company reported revenue of Rs. 4,440 crore, an increase of 4.62 percent year over year from Rs. 4,244 crore in Q1FY25. The Net profit also increased by 22.50 percent from Rs. 791 crore in Q1FY25 to Rs. 969 crore in Q1FY26.
Hindustan Aeronautics Ltd
Hindustan Aeronautics Limited (HAL) is engaged in the design, development, manufacturing, repair, and maintenance of aircraft, helicopters, aero engines, avionics, and related systems. Operating through five complexes, 20 production divisions, and ten R&D centres across the country, along with 12 joint ventures and two subsidiaries.
With a market valuation of Rs. 2,93,190.96 crore, Hindustan Aeronautics Ltd closed at Rs. 4,384 on Tuesday. The stock’s P/E ratio is 35.4x lower as compared to industry P/E of 66.6x. The ROCE of 33.9 percent, ROE of 26.1 percent, highlights the company’s financial position.
Hindustan Aeronautics Ltd has a piotroski score of 7, and its revenue for Q1FY26 was Rs. 4,819 crore, increased by 10.83 percent as compared to 4,348 crore in Q1FY25. Whereas, net profit declined by 3.69 percent from Rs. 1,437 crore in Q1FY25 to Rs. 1,384 crore in Q1FY26.
Paras Defence and Space Technologies Ltd
Paras Defence and Space Technologies (PDST) is a private sector company focused on designing, developing, manufacturing, and testing a wide range of defence and space engineering products and solutions. Its operations are spread across four key segments: Defence & Space Optics, Defence Electronics, Heavy Engineering, and Electromagnetic Pulse (EMP) Protection Solutions.
With a market valuation of Rs. 5,253.09 crore, Paras Defence and Space Technologies Ltd closed at Rs. 651.85 on Tuesday. The stock’s P/E ratio is 82.7x higher as compared to industry P/E of 66.6x. With ROE of 11.5 percent, ROCE of 15.6 percent and debt to equity ratio of 0.04, highlights the company’s financial position.
Paras Defence and Space Technologies Ltd has a piotroski score of 7, and its revenue for Q1 FY26 was Rs. 93 crore, increased by 10.71 percent as compared to 84 crore in Q1 FY25. Whereas, operating profit declined by 8.33 percent from Rs. 24 crore in Q1FY25 to Rs. 22 crore in Q1FY26.
Garden Reach Shipbuilders & Engineers Ltd
Garden Reach Shipbuilders & Engineers Ltd (GRSE) is one of India’s leading shipbuilding companies, operating under the Ministry of Defence. It mainly builds ships for the Indian Navy and the Indian Coast Guard.
With a market valuation of Rs. 27,814.37 crore, Garden Reach Shipbuilders & Engineers Ltd closed at Rs. 2,428.10 on Tuesday. The stock’s P/E ratio is 49.5x lower as compared to industry P/E of 66.6x. It has an ROE of 28.1 percent, ROCE of 37.3, indicating the company’s financial position.
Garden Reach Shipbuilders & Engineers Ltd has a piotroski score of 8, and its revenue for Q1 FY26 was Rs. 1,310 crore, increased by 29.70 percent as compared to 1,010 crore in Q1 FY25. Net profit rose by 37.93 percent from Rs. 87 crore in Q1FY25 to Rs. 120 crore in Q1FY26.
Mishra Dhatu Nigam Ltd
Mishra Dhatu Nigam Ltd (MIDHANI), founded in 1973 in Hyderabad by the Ministry of Defence, manufactures superalloys, titanium, special steels, and other special metals. Its products include long and flat products, forgings, castings, and special items like biomedical implants, fasteners, and welding consumables. The company also provides testing, evaluation, and consultancy services in chemical, mechanical, non-destructive, and magnetic testing.
With a market valuation of Rs. 7,115.17 crore, Mishra Dhatu Nigam Ltd closed at Rs. 379.80 on Tuesday. The stock’s P/E ratio is 60.6x lower as compared to industry P/E of 66.6x. It has an ROE of 8.05 percent, ROCE of 10, indicating the company’s financial position.
Mishra Dhatu Nigam Ltd has a piotroski score of 8, and its revenue for Q1 FY26 was Rs. 170 crore, increased by 4.29 percent as compared to 163 crore in Q1 FY25. Net profit rose by 160 percent from Rs. 5 crore in Q1FY25 to Rs. 13 crore in Q1FY26.
Written by Akshay Sanghavi
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