HAL vs BEL Defence Stocks: India’s defence sector continues to receive significant emphasis as the Ministry of Defence (MoD) has increased the defence budget to ₹6.81 lakh crore for FY26, marking a 9.5% growth from the previous year. Out of this, ₹1.80 lakh crore is set aside for capital expenditure on new aircraft, warships, and other essential military hardware.
Furthermore, the government has set an ambitious target to grow domestic defence manufacturing to nearly $34.7 billion by FY29. Indian defence exports are also on the rise, having surpassed ₹21,000 crore in CY24, with a goal of reaching ₹50,000 crore by 2029.
Stock Performance: HAL vs BEL
Hindustan Aeronautics Limited (HAL), one of India’s flagship defence manufacturers with a market cap of ₹3.32 lakh crore, closed at ₹4,971.95 on BSE, gaining 1.5% on Friday. Despite a one-year return dip of 6%, it has recovered over the past month.
Bharat Electronics Limited (BEL), with a market cap of ₹2.98 lakh crore, closed at ₹408.05 on BSE, gaining 2.4%. BEL posted a strong one-year return of approximately 31% and a 12% gain in the last month.
Business Focus: Diverse Portfolios
HAL’s offerings span from manufacturing Light Combat Aircraft (LCA) and helicopters like Dhruv, Rudra, and LCH, to civil aviation assets and crucial space components. Additionally, it provides avionics, maintenance, repair, and overhaul (MRO) services.
BEL, on the other hand, specializes in advanced electronics systems for defence—such as radar, electronic warfare, and cyber security—while also serving non-defence sectors with technologies like EVMs, smart-city solutions, healthcare electronics, and solar systems.
Order Book Strength
HAL’s order book grew significantly to ₹1.89 lakh crore by FY25, nearly double its FY24 figure of ₹94,127 crore. The company also expects additional orders worth around ₹1 lakh crore in the next two years for fighter jets, helicopters, and maintenance contracts.
BEL, as of April 1, 2025, reported an order book of ₹71,650 crore, with recent inflows amounting to ₹18,000 crore. BEL is also poised to supply electronics systems for the Next-Generation Corvette program, potentially adding ₹6,000–10,000 crore to its pipeline.
Growth and Profitability Outlook
HAL expects 8–10% revenue growth in FY26, with a belief that actual growth could escalate into double digits as execution improves. EBITDA margins are projected in the 31–39% range over the medium term.
BEL is targeting around 15% revenue growth, with an expected EBITDA margin near 27%. It plans capex of over ₹1,000 crore, a $120 million export revenue in FY26, and aims for revenue CAGR of 15–17.5% over the next five years, highlighting its strong R&D and indigenisation focus.
Recent Financial Results
In Q4 FY25, HAL’s revenue fell nearly 7% to ₹13,700 crore, with net profit decreasing 8% year-on-year to ₹3,977 crore. However, over three years, HAL’s revenue grew 8% CAGR and net profit showed an 18% CAGR.
BEL’s Q4 FY25 performance revealed a 7% increase in revenue to ₹9,150 crore and an 18% rise in net profit to ₹2,127 crore. Over three years, BEL’s revenue grew at a 15.6% CAGR while net profit surged with a 30% CAGR.
Start Your Investment Journey with 5Paisa App – Download here
Final Take: HAL or BEL?
Both HAL and BEL benefit from India’s growing defence investment and self-reliance initiatives. HAL offers deep diversification across aircraft and aerospace systems and boasts a massive, expanding order book.
BEL, though more focused on electronics, has shown stronger financial momentum with higher short-term returns and a healthier three-year growth trajectory.
Hindustan Aeronautics Limited may appeal to investors seeking broad exposure in aerospace manufacturing and maintenance. Those prioritizing consistent financial growth and a robust electronics play might find Bharat Electronics Limited more compelling.
Disclaimer:
The information presented in this article is for informational purposes only and should not be considered as financial or investment advice. Investing in stocks, including defence sector companies like Hindustan Aeronautics Limited (HAL) and Bharat Electronics Limited (BEL), involves risk.
Readers are advised to conduct their own research or consult a certified financial advisor before making any investment decisions. The author and publisher are not responsible for any financial losses incurred.
