Amid a rally in the PSU stocks, Indian defence PSU stocks, Hindustan Aeronautics Ltd (HAL) and Bharat Electronics Ltd (BEL) delivered stellar returns to their respective shareholders. Over the last five years, both defence PSUs have delivered returns of over 1,000% to their shareholders. However, in 2025, the HAL share price has remained an ideal sell-on-rise stock, while the BEL share price has ascended by over 40%.
This has triggered speculation about whether BEL shares are still in a bull trend, and the government’s focus and rising expenditure on national security and defence will continue to work as a catalyst for the BEL share price rally.
What’s fueling the BEL share price?
Highlighting the fundamentals that are fueling BEL’s share price, Seema Srivastava, Senior Research Analyst at SMC Global Securities, said, “BEL’s long-term journey is shaping into a strong compounding story as the company evolves from a defence electronics supplier into a critical pillar of India’s modern warfare systems. With an order book of ₹75,600 crore and clear visibility of ₹27,000 crore in FY26 inflows (potentially ₹57,000 crore including QRSAM), BEL enters a phase of structural, not cyclical growth. The company’s confidence in delivering 15% revenue growth and sustaining EBITDA margins of 27% or more underscores a rare stability in defence manufacturing. Multiple upcoming programmes such as QRSAM, LCA avionics, NGC radar orders, emergency procurements and strategic roles in Project Kusha add layered, multi-year growth triggers that will unfold sequentially beyond FY27.”
On why BEL share price outperformed HAL share price in 2025, Seema Srivastava of SMC Global Securities said, “Compared to HAL, whose massive ₹2.5 trillion order book is tied to large and lumpy aircraft platforms, BEL benefits from shorter execution cycles and much broader product diversification across radars, electronic warfare, missile electronics, communication systems and command-control platforms. As India deepens defence indigenisation and shifts toward electronic-centric warfare, BEL’s positioning becomes even stronger.”
Comparing the fundamentals of HAL and BEL, Sachin Jasuja, Head of Equities and Founding Partner at Centricity WealthTech, said, “As of October 2025, BEL’s order book is valued at approximately ₹74,000 crore, characterised by short-duration and recurring contracts. These contracts typically involve missile systems, naval electronics, and electronic warfare products, allowing for faster execution timelines and more predictable revenue streams. In contrast, HAL has a larger but longer-gestation order book of nearly ₹1.89 trillion as of FY25. HAL’s projects are capital-intensive and involve significant reliance on imported engines like the GE F414, despite ongoing efforts to enhance indigenisation.”
HAL vs BEL: Which is better?
“Management commentary from BEL’s recent Q2 FY26 earnings underscores these shorter project cycles, which enable quicker order turnarounds, improved revenue visibility, and consistent margin delivery. BEL is also actively pursuing export markets and increasing indigenisation, which should support strong order inflows and broaden its growth opportunities. Meanwhile, HAL’s aerospace programs, while essential and large-scale, naturally involve longer development periods and require heavier capital investments,” Jasuja added.
Sachin Jasuja stated that BEL and HAL heavily depend on government orders, policy continuity, and defence budget allocations, which represent systemic risks. However, BEL’s lighter asset base and higher revenue velocity structurally position it for faster growth. Although BEL currently commands a valuation premium, its strong R&D pipeline, expanding product portfolio, and operational leverage justify this premium to a significant extent.
Expecting the trend to continue further, Seema Srivastava said, ” HAL will remain a scale giant, but BEL offers a more scalable and predictable compounding runway. With margin stability, expanding exports, rising R&D strength and a widening role in India’s strategic programmes, BEL share price has the potential to outperform HAL shares on percentage returns and emerge as a long-term multibagger in the defence space.”
Is BEL next HAL on steroids?
On whether BEL is next HAL on steroids, Sachin Jasuja said, “It may be somewhat exaggerated to label BEL as the ‘next HAL on steroids,’ given that both companies operate in distinct yet complementary niches within the Indian defence ecosystem, BEL already commands a ₹3 lakh crore market cap with slightly rich valuations and a larger base. Even so, BEL’s effective execution, short-cycle order book, and strategic focus on technology-intensive defence electronics continue to make it attractive as a potential growth candidate, especially as its export ambitions gain traction amid a changing geopolitical environment that is driving rising defence spending across most countries.”
Key Takeaways
- Bharat Electronics Ltd (BEL) is experiencing rapid growth due to its diversified product range and shorter execution cycles.
- BEL’s order book and revenue visibility position it favorably compared to Hindustan Aeronautics Ltd (HAL), which has longer project durations.
- Government orders and defense budget allocations are vital for the success of both BEL and HAL, with BEL poised for faster growth.