Goldman Sachs’ Top Defence Picks: Up to 58% Upside in These Stocks

Brokerage sees strong earnings momentum in private defence players amid India’s expanding military and export ambitions

Six Defence Stocks Get “Buy” Ratings from Goldman Sachs

Global investment bank Goldman Sachs has initiated coverage on eight Indian aerospace and defence stocks as of October 3, recommending six as “buy”, one as “neutral,” and one as “sell.” The firm sees a compelling opportunity in India’s growing defence sector, with upside potential of up to 58% in select names.

• Top Buy Ratings:
  • PTC Industries: Target ₹24,725 | Upside: 58%
  • Astra Microwave: Target ₹1,455 | Upside: 45%
  • Data Patterns: Target ₹3,640 | Upside: 38%
  • Solar Industries: Target ₹18,215 | Upside: 36%
  • Azad Engineering: Target ₹2,055 | Upside: 28%
  • Bharat Electronics: Target ₹455 | Upside: 12%

Other Ratings: Mixed Outlook for HAL and Bharat Dynamics

While private players get most of the attention, Hindustan Aeronautics Ltd. (HAL) and Bharat Dynamics Ltd. receive more conservative ratings:

• HAL: Rated Neutral | Target ₹5,255 | Upside: 9%
• Bharat Dynamics: Rated Sell | Target ₹1,375 | Downside: -11%

Goldman Sachs expressed caution over state-run defence companies, noting their slower earnings growth and limited exposure to emerging technologies.

Why Goldman Sachs Is Bullish on India’s Defence Sector

The brokerage outlined three strategic drivers for its optimism:

1. Expanding Domestic Defence TAM
   • India’s defence Total Addressable Market is expected to grow sixfold to over ₹10 lakh crore over the next 20 years.
2. Indigenization at the Tech Base
   • There’s rising scope for self-reliance in defence manufacturing, especially at the lower technology pyramid, where Indian firms are gaining capabilities.
3. Rising Defence Exports
   • India is targeting ₹50,000 crore in defence exports by FY2029, up from ₹23,600 crore last year.

Private Players Favoured Over PSUs

Goldman Sachs sees private sector defence firms outperforming PSUs, driven by:

• Higher exposure to cutting-edge technologies, aligned with the Technology Perspective and Capability Roadmap (TPCR) 2025.
• Better prospects from global defence spending trends.
• Projected EPS CAGR of 32% for private firms vs. 13% for PSUs.

Recent Stock Performance: Mixed Momentum

Despite the bullish outlook, near-term stock trends have varied:

• Nifty India Defence Index is up 5.3% over the last month.
• MTAR Technologies led gains, rising over 30%.
• Solar Industries and Astra Microwave, despite high upside targets, have declined over 5% in the past month — offering potential entry points for long-term investors.

Stock Ratings Snapshot – Goldman Sachs (Oct 2025)