Goldman Sachs identifies key growth drivers for its stock picks in India’s defence sector. The domestic defence market is expected to surge sixfold over 20 years, exceeding Rs 10 lakh crore. Opportunities exist for indigenisation at the lower tech levels, while defence exports are set to more than double to Rs 50,000 crore by FY29 from Rs 23,600 crore, highlighting strong long-term potential.
Goldman Sachs favours private sector companies over state-run ones, citing stronger exposure to emerging technologies highlighted in the Technology Perspective and Capability Roadmap (TPCR) 2025. This outlook reflects confidence that private players are better positioned to leverage technological advancements, potentially driving higher growth and competitive advantage in the evolving market landscape.
Goldman Sachs projects private defence companies to achieve a 32% CAGR in EPS, significantly outpacing PSU stocks at 13%. The firm highlights that private players stand to gain more from increasing global defence spending, positioning them for stronger growth, higher profitability, and greater market opportunities compared to state-run counterparts.
Here are the defence stocks with robust potential upside of up to 51%;
Solar Industries
Solar Industries is a leading global manufacturer of explosives, initiating systems, and ammunition, serving critical sectors like mining, infrastructure, and defence. Its vision is to emerge as a global leader by providing innovative solutions with a primary focus on safety, quality, and reliability.
With a market capitalization of Rs 1,25,156.80 crore, the shares were trading at Rs 13,831.00 per share, increasing around 3.44 percent as compared to the previous closing price.
Goldman Sachs, one of the well-known brokerages globally, gave a ‘Buy’ rating on the defence stock with a target price of Rs 18,215 apiece, indicating a potential upside of 32 percent from Friday’s price of Rs 13,831.00 per share.
PTC Industries
PTC Industries is a leading manufacturer in the engineering sector, providing critical components for the aerospace, defence, oil and gas, and marine industries. The company’s mission is to be a top global manufacturer of engineered metal parts using sustainable, disruptive, and innovative technologies. Significantly, over 85% of its products are exported to renowned global clients in Europe, North America, Asia, and South America.
With a market capitalization of Rs 24,511.48 crore, the shares were trading at Rs 16,358.30.00 per share, increasing around 4.22 percent as compared to the previous closing price.
Goldman Sachs, one of the well-known brokerages globally, gave a ‘Buy’ rating on the defence stock with a target price of Rs 24,725 apiece, indicating a potential upside of 51 percent from Friday’s price of Rs 16,358.30 per share.
Astra Microwave
Astra Microwave Products Limited is a leading Indian designer and manufacturer of high-tech RF and microwave modules, sub-systems, and systems for critical applications. The company’s core vision is to lead the wireless communication revolution through dedicated research and development, aiming for technological leadership and excellence.
With a market capitalization of Rs 9,827.28 crore, the shares were trading at Rs 1,035.05.00 per share, increasing around 3.02 percent as compared to the previous closing price.
Goldman Sachs, one of the well-known brokerages globally, gave a ‘Buy’ rating on the defence stock with a target price of Rs 1,455 apiece, indicating a potential upside of 40 percent from Friday’s price of Rs 1,035.05 per share.
Data Patterns
Data Patterns is a leading Indian defence and aerospace company, specialising in high-tech electronic solutions like radars and avionics to support national security. The company’s vision is anchored in delivering advanced electronic systems that are specifically designed to cater to India’s most critical strategic needs.
With a market capitalization of Rs 15,304.90 crore, the shares were trading at Rs 2,733.80 per share, increasing around 3.96 percent as compared to the previous closing price.
Goldman Sachs, one of the well-known brokerages globally, gave a ‘Buy’ rating on the defence stock with a target price of Rs 3,640 apiece, indicating a potential upside of 33 percent from Friday’s price of Rs 2,733.80 per share.
Azad Engineering
Azad Engineering makes highly complex and vital precision parts for important global industries like aerospace, defence, energy, and oil and gas. The company operates on the core principles of precision, performance, and progress, driving its commitment to excellence in manufacturing. It delivers these mission-critical components to global Original Equipment Manufacturers (OEMs) in highly regulated sectors across 17 countries.
With a market capitalization of Rs 11,292.12 crore, the shares were trading at Rs 1,748.50 per share, increasing around 9 percent as compared to the previous closing price
Goldman Sachs, one of the well-known brokerages globally, gave a ‘Buy’ rating on the defence stock with a target price of Rs 2,055 apiece, indicating a potential upside of 28 percent from Friday’s low price of Rs 1,602.45 per share.
Written by Abhishek Singh
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