Stocks to buy: Hindustan Aeronautics, Bharat Dynamics among top defence stock picks by Choice Broking

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₹722.6 billion. Analysts at Choice Broking expect the defence sector to witness healthy spending over next 5-6 years, acquisition of new platforms and modernization of existing platforms, which will lead to an increase in spending in the coming years.

In the coming quarter Indian Defence market will continue to grow on the back of execution and delivery of projects like LCA Mk1A, LCH, LUH and HTT-40, Naval fleets, upgraded Bombs & Missiles, and modernization of platforms will drive the demand for the near future, according to Choice Broking. Also Read: Stocks to buy: Ultratech Cement, JK Lakshmi among top cement stock picks by Axis Securities for up to 10% upside “We are optimistic on the growth story of Defence manufacturing companies driven by the Government of India's push for localization.

We expect defence companies under our coverage to continue benefiting from the trend of platform acquisition and technological upgrades," said the brokerage in a report. Its top picks in the defence space are Hindustan Aeronautics, Bharat Dynamics and Astra Microwave Products.

Choice Broking has a positive outlook on Hindustan Aeronautics (HAL), as the company faces limited competition from the private sector due to the high capital intensity and long gestation periods for developing manufacturing capabilities in the sector. This is supported by strategic diversification into civilian sector; some big ticket future orders with new orders anticipated for LUH, LCH, Su 30 and HIT 40 in the near to medium term; strategically positioned itself as a sole supplier domestically; collaboration with foreign giants like- Safran, Airbus and the company's huge order book, would support the the growth story of the company.