Jefferies has initiated coverage on Solar Industries and Astra Microwave with Buy ratings, citing strong defence growth prospects and rising order books. The brokerage also maintained Buy ratings on Hindustan Aeronautics (HAL) and Bharat Electronics (BEL), while assigning a Hold rating to Bharat Dynamics.

Jefferies expects robust earnings growth across these companies, supported by rising defence spending, indigenisation efforts and expanding export opportunities. India has been pushing self-reliance in defence manufacturing through initiatives such as the Make in India programme and positive indigenisation lists, which restrict imports of certain equipment and push procurement toward domestic suppliers. Defence exports have risen in the period following Operation Sindoor, the report noted. Operation Sindoor refers to India's military strikes in May 2025 on terror infrastructure in Pakistan and Pakistan-occupied Kashmir, conducted after the Pahalgam terror attack.

$60 Billion Domestic Opportunity

Jefferies highlighted a domestic defence opportunity valued at approximately $60 billion.

Solar Industries: Rs 180 Billion Defence Order Book

Solar Industries, primarily a manufacturer of explosives and munitions, carries a defence order book of Rs 180 billion, according to the brokerage's initiation of coverage.

Astra Microwave: Moving Up the Value Chain

Astra Microwave, a supplier of microwave and RF components used in radar and communication systems, is moving up the value chain, Jefferies said in its initiation note on the company.

HAL and BEL Remain Core Plays

HAL, India's state-owned aircraft maker, and Bharat Electronics, a state-owned defence electronics company, remain core plays in the Indian defence sector, according to Jefferies, which reiterated Buy ratings on both companies.

Source: Economic Times Markets