Leading Indian defence stocks, including Hindustan Aeronautics Ltd (HAL) and Bharat Electronics Ltd (BEL), are poised for significant revenue expansion in the second quarter of Fiscal Year 2027, according to a recent analysis by JM Financial. The report projects HAL to lead the sector with a substantial 22% year-on-year (YoY) revenue surge.
HAL Poised for Strong Q2 Revenue Growth
Hindustan Aeronautics Ltd (HAL) is expected to be a frontrunner in revenue growth for Q2 FY27, driven by crucial deliveries of LCA FOC Mk1, HTT trainer aircraft, and Dhruv NG helicopters. While revenue is projected to climb 22% YoY, JM Financial notes that a higher proportion of manufacturing revenue might exert pressure on HAL's gross and EBITDA margins quarter-on-quarter (QoQ).
Key areas to watch include the progress on Tejas Mk1A deliveries, where engine supply constraints have reportedly eased with 14 engines supplied so far. The Indian Air Force and HAL are scheduled to review delivery schedules in mid-October 2026. Potential near-term order inflows also remain a significant monitorable. JM Financial has an 'Add' rating on HAL with a target price of Rs 5,210.
BEL Anticipates 10% Revenue Increase
Bharat Electronics Ltd (BEL) is forecast to achieve a 10% YoY revenue growth in Q2 FY27. The company's gross margin is expected to remain stable, with operating leverage potentially boosting its EBITDA margin. BEL is also projected to record new order inflows of approximately Rs 3,100 crore in Q2 FY27, contributing to 27% of the management's annual guidance of Rs 25,000 crore (excluding the Quick Reaction Surface-to-Air Missile order). Updates regarding the QRSAM order timeline will be closely tracked. JM Financial maintains a 'Buy' rating on BEL, setting a target price of Rs 485.
Data Patterns and Ideaforge: Order Pipeline Crucial
For Data Patterns, Q2 FY27 revenue is estimated at Rs 230 crore, representing a 27% YoY decline compared to a strong Q2 FY22 which benefited from a large order execution. The conversion of its existing order pipeline into new inflows will be a critical factor for future performance. Data Patterns has an 'Add' rating with a target price of Rs 4,660.
Ideaforge Technology Ltd's Q2 FY27 revenue is estimated at Rs 120 crore, aligning with management guidance to complete its outstanding FY26-end order book by Q3 FY27. The outlook for new order inflows remains a key watchpoint. Ideaforge also holds an 'Add' rating, with a target price of Rs 905.
JM Financial's analysis underscores HAL's anticipated leadership in revenue growth despite potential margin pressures, while highlighting the importance of order conversions for BEL, Data Patterns, and Ideaforge in the burgeoning Indian defence sector.