Defence Stocks to Buy: HAL, Bharat Dynamics, MIDHANI Are DAM Capital's Top Picks With Up to 39% Upside, Check Targets

Defence has been one of the most watched themes of 2026, helped by large approvals from the Defence Acquisition Council and a push for local manufacturing. Many investors now ask which defence stocks to buy after a mixed few months for the sector.

This guide on defence stocks to buy covers what DAM Capital says, the targets and upside for each pick, the sector numbers behind the call, what ICICI Securities expects from the September quarter results and the risks. Figures that I work out myself are labelled.

One point needs care. The headline refers to up to 39% upside, but the only DAM Capital targets I could find are from its 29 April 2026 initiation, so the upside below is calculated on those.

Click Here – Get Free Investment Predictions

Defence Stocks to Buy: DAM Capital's Targets

Stock	DAM Capital rating	Target price	Price on 14 Oct 2026	Upside (my calculation)
Hindustan Aeronautics (HAL)	Buy	Rs 6,300	Rs 4,925	About 27.9%
Bharat Dynamics (BDL)	Buy	Rs 1,540	Rs 1,125	About 36.9%
Mishra Dhatu Nigam (MIDHANI)	Buy	Rs 430	Rs 432.70	About -0.6%
Bharat Electronics (BEL)	Buy	Rs 530	Not checked
Solar Industries	Buy	Rs 17,060	Not checked
Astra Microwave	Buy	Rs 1,300	Not checked
Zen Technologies	Buy	Rs 1,990	Not checked
Garden Reach Shipbuilders	Neutral	Rs 2,660	Not checked
Mazagon Dock Shipbuilders	Neutral	Rs 2,770	Not checked

These targets are from the 29 April 2026 initiation, and DAM Capital calls HAL and BEL its top defence PSU picks and Astra Microwave and Solar Industries its top private picks in that note. The headline of the 14 October article names HAL, Bharat Dynamics and MIDHANI as its preferred public-sector defence stocks to buy, with opportunities in aircraft, materials and missiles.

MIDHANI at Rs 432.70 is already above the Rs 430 April target, so for it to give upside the target must have been raised. The 39% in the headline fits Bharat Dynamics if measured from a price near Rs 1,108 (my calculation), but I cannot confirm which stock it refers to.

Risk: Using an April target for defence stocks to buy against an October price can overstate or understate upside, so treat the figures above as a guide until the latest note is checked.

Screen defence and aerospace stocks on the Univest Screener

Where the Defence Stocks to Buy Trade Now

Stock	Price on 14 Oct 2026	52-week low	52-week high	Position (my calculation)
HAL	Rs 4,925	Rs 3,479.20	Rs 5,149.90	About 4% below the high
Bharat Dynamics	Rs 1,125	Rs 1,048.25	Rs 1,633.15	About 31% below the high, 7% above the low
MIDHANI	Rs 432.70	Rs 266.70	Rs 481.90	About 10% below the high

The three defence stocks to buy have behaved very differently. HAL is close to its high, MIDHANI has risen from a low of Rs 266.70 and Bharat Dynamics is near the bottom of its range. One page shows the six-month return as 18.8% for HAL, 31.6% for MIDHANI and a fall of 15.6% for Bharat Dynamics, though the same pages give different figures in their summary text, so check live data.

The gap explains why upside differs so much across these defence stocks to buy. For Bharat Dynamics, the price has fallen about 25% in a year, so the same target looks far above the price, while for the defence stocks to buy that have already rallied, upside is thinner.

Risk: A stock near the bottom of its range can look attractive on upside and still keep falling if earnings disappoint.

The Sector Case Behind DAM Capital's Defence Stocks to Buy

Item	Figure	Source note
Opportunity over five years	About Rs 15 trillion	DAM Capital, with defence PSUs expected to gain most
DAC-approved contracts to be awarded	About Rs 6 trillion over two years	DAM Capital
Defence production target by FY29	Rs 3 trillion	Government target
Defence exports target by FY29	Rs 50,000 crore	Government target
Domestic procurement share	88% in FY25, up from 58% in FY20	Business Standard report
Defence exports in FY26	Rs 38,420 crore, of which PSUs 55%	One source prints Rs 138,424 crore, which looks like a typing error

DAM Capital describes the sector behind these defence stocks to buy as set for multi-decade growth as India moves from importing to self-reliance and exports. Geopolitical tension is treated as a tailwind. In its latest view, as summarised in the headline, growth should broaden beyond orders to technology, local manufacturing, exports and partnerships.

That matters for stock selection. Orders have already lifted valuations of defence stocks to buy, so the next phase depends on execution, margins and cash flow, which is why a note focused on the defence stocks to buy looks at capability and not only order books.

Risk: For defence stocks to buy, large approvals do not become revenue until contracts are signed and delivered, and delays are common in defence.

Download the Univest iOS App or Univest Android App to track defence stocks and get target price alerts.

Q2 Preview: What ICICI Securities Expects From Defence Stocks to Buy

Stock	Q2 FY27 expectation (year on year)	View
HAL	Revenue up about 6% on a higher base and further Tejas Mk-1A delivery delays	Preferred pick
BEL	Revenue up about 15%, margins at the upper end of guidance	Preferred pick
Bharat Dynamics	Revenue down about 2%, EBITDA down about 15%, profit down about 17% on a high base	No rating
MIDHANI	Revenue up about 15% with steady execution	No rating
Zen Technologies	Revenue up about 55%	No rating
Solar Industries	Revenue up about 52%	No rating

The ICICI Securities note was published on 7 October 2026. It is a different brokerage, so it does not confirm or reject the DAM Capital targets, but it shows the near-term picture: Bharat Dynamics faces a weak quarter on a high base even though Akash execution is improving.

This is a useful contrast for defence stocks to buy. DAM Capital looks at the long-term story, while the quarter ahead could be soft for the missile maker, so timing of entry matters for these defence stocks to buy.

Risk: A weak Q2 for Bharat Dynamics can push the price down before the longer-term story plays out.

Risks to Defence Stocks to Buy

Risk	Detail
Execution delays	HAL's Tejas deliveries are already running late
High base	Bharat Dynamics faces a tough comparison in Q2
Valuation	MIDHANI is at its April target and near its 52-week high
Order timing	DAC approvals take months to convert into contracts
Market	The Nifty India Defence index can fall sharply in a weak market
Data gaps	I could not confirm the October targets or the 39% figure

Defence stocks tend to move together on policy news and diverge on quarterly numbers. A buyer of any of these defence stocks to buy should check position size, because a 10% to 15% swing around results is not unusual for the group.

What to Watch Next for Defence Stocks to Buy

1. Q2 FY27 results from HAL, BEL, Bharat Dynamics and MIDHANI
2. The full DAM Capital note, to confirm updated targets and the 39% upside
3. HAL's Tejas Mk-1A delivery schedule
4. New Defence Acquisition Council approvals and contract signings
5. Bharat Dynamics holding above its 52-week low of Rs 1,048.25

Conclusion

DAM Capital remains positive on HAL, Bharat Dynamics and MIDHANI, with April targets implying about 28% and 37% upside for the first two and none for MIDHANI at today's price. Treat these defence stocks to buy as long-term ideas and confirm the latest targets before acting.

Frequently Asked Questions

Which are DAM Capital's top defence stocks to buy?

Ans. The headline names HAL, Bharat Dynamics and MIDHANI as preferred public-sector picks. In its April 2026 initiation, DAM Capital also had Buy ratings on BEL, Solar Industries, Astra Microwave and Zen Technologies.

What are the DAM Capital target prices?

Ans. From its 29 April 2026 initiation, HAL Rs 6,300, Bharat Dynamics Rs 1,540, MIDHANI Rs 430, BEL Rs 530 and Solar Industries Rs 17,060.

How much upside do these defence stocks to buy have?

Ans. From the 14 October prices, about 28% for HAL and about 37% for Bharat Dynamics, while MIDHANI is about 1% below its Rs 430 target (my calculation).

Is the 39% upside in the headline confirmed?

Ans. No. I could not find the 14 October note. The figure fits Bharat Dynamics' Rs 1,540 target from a price near Rs 1,108 (my calculation), but it may refer to updated targets.

Why does DAM Capital like these defence stocks to buy?

Ans. It sees multi-decade growth from import substitution, exports, local manufacturing and about Rs 6 trillion of approved contracts to be awarded over two years.

What does ICICI Securities expect from Q2?

Ans. HAL revenue up about 6%, BEL up about 15%, MIDHANI up about 15% and Bharat Dynamics revenue down about 2% with profit down about 17%.

What are the risks for defence stocks to buy?

Ans. Delivery delays, a high base, valuations, slow conversion of approvals into orders and sharp swings in a weak market.

Is this article investment advice?

Ans. No. It is educational and not a recommendation to buy or sell.