Jefferies maintains a positive outlook on India’s defence and industrial manufacturing sector, upgrading Hindustan Aeronautics, while reaffirming buy ratings on Bharat Electronics and Data Patterns amid growing sector confidence.
Jefferies has kept a constructive view on India’s defence and industrial manufacturing names, naming Hindustan Aeronautics as a top pick while maintaining buy ratings on Bharat Electronics and Data Patterns. The brokerage said earnings delivery from existing order books remains the key driver for the group, reflecting confidence that execution will continue to support results even as some programmes move at a uneven pace. According to NDTV Profit, the call also sits within Jefferies’ broader belief that defence remains one of the clearest ways to play India’s industrial and capex cycle.
The most bullish call was on Hindustan Aeronautics, where Jefferies lifted its target price to Rs6,800 from Rs6,300 and said the stock could rise 34%. The brokerage rolled its valuation forward to 35 times earnings on a September 2028 basis, pointing to visibility for a 16% compound annual earnings growth rate between FY26 and FY30 as order-book execution improves. Business Standard and Moneycontrol also reported that Jefferies sees defence order flows and earnings visibility as central to its positive stance on the sector.
For Bharat Electronics, Jefferies kept a buy rating but trimmed its target to Rs490 from Rs550, implying about 19% upside. The note, dated 17 August, said June-quarter order inflow fell 49% from a year earlier, mainly because the prior-year period had included roughly Rs5,000 crore of spillover orders from FY25. Margins eased to 25.1% from a year ago, with product mix weighing on gross margins, though operating leverage from strong execution helped cushion the decline. Jefferies said it still expects FY27 margins to stay above 27%, even as it noted delays on the QRSAM programme.
Data Patterns remained another preferred name, with Jefferies assigning a buy rating and a target price of Rs5,545, around 25% above the current level. The brokerage cited a visible order book, a healthy pipeline, rising indigenisation and India’s export push as reasons it sees medium-term revenue growth as well supported. Related coverage from The Economic Times said Jefferies is also positioning for a larger defence capital spending cycle in the FY27 budget, while Livemint reported that sector execution has remained strong across missiles, avionics and radar programmes, reinforcing the case for companies with solid programme visibility.
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