Stocks To Buy: Goldman Sachs recommends these defence stocks for up to 58% upside

Brokerage firm Goldman Sachs has initiated coverage on eight aerospace and defence stocks on Friday, October 3. Six of them have a "buy" recommendation, one with a "neutral" and one has a "sell" rating.

Solar Industries Ltd., PTC Industries Ltd., Astra Microwave Ltd., Data Patterns Ltd., Azad Engineering Ltd., and Bharat Electronics Ltd. have been assigned a "buy" recommendation with upside potential ranging from 12% to as high as 58%.

The brokerage is "neutral" on Hindustan Aeronautics Ltd. with a potential upside of 9%, while it has initiated on Bharat Dynamics with a "sell" rating and a downside potential of 11%.

Stock	Rating	Price Target (₹)	Upside (%)
Solar Industries	Buy	18,215	36%
PTC Industries	Buy	24,725	58%
Astra Microwave	Buy	1,455	45%
Data Patterns	Buy	3,640	38%
Azad Engineering	Buy	2,055	28%
Bharat Electronics	Buy	455	12%
Hindustan Aeronautics	Neutral	5,255	9%
Bharat Dynamics	Sell	1,375	-11%

Goldman Sachs has highlighted in its note that the stocks it has picked are beneficiaries of three key themes:

• First, the increase in domestic defence Total Addressable Market (TAM), by more than six-fold, in comparison to financial year 2025 over the next 20 years to over ₹10 lakh crore.


• Second, scope for indigenization at the bottom of the tech pyramid.


• and third, higher defence exports, with the government targeting ₹50,000 crore worth of exports by financial year 2029, compared to ₹23,600 crore last year.

Goldman Sachs added that it is relatively more positive on private sector players, in comparison to the state-run companies, as the recently released Technology Perspective and Capability Roadmap (TPCR) 2025, focuses on new technologies, in which the private sector players are better exposed.

Private defence players are expected to report a higher Compounded Annual Growth Rate (CAGR) for its Earnings per Share (EPS) of 32%, in comparison to 13% for PSU stocks, Goldman Sachs said, adding that the private players could also be bigger beneficiaries from the rise in the global defence spending.

The Nifty India Defence Index has risen 5.3% in the last one month, with stocks like MTAR Tech emerging as the top performer with gains of over 30%. Astra Microwave and Solar Industries, listed by Goldman Sachs among stocks with the highest upside potential, have declined over 5% each in the last one month.