War is bad for people and economies but good for business. Old aphorism, but it’s manifesting in most parts of the world today. 

India’s forever-in-the-works defense reforms are finally on a rocket ship. The lift-off is felt in the private sector, which, from nearly zero companies in defence production 15 years ago, can now boast of more than 400 players.

Late in October, the Defence Acquisition Council approved procurements worth Rs 79,000 crore for the armed forces. Earlier, in September, the ministry released the Technology Perspective and Capability Roadmap (TPCR) 2025—a 15-year roadmap for India’s military modernisation covering 300 technology and capability fields. 

Among all the major public sector defence contractors, Bharat Electronics Limited (BEL) is better poised to benefit from this urgency and reforms because, unlike Hindustan Aeronautics Ltd. or Bharat Dynamics Ltd., it supplies to all three forces. It has the least customer concentration risk. Also, historically, unlike HAL (as we wrote here and here), BEL has usually delivered on time. 

It reported some impressive second-quarter numbers last week. The revenue from operations grew nearly 26% year-on-year to Rs 5,764 crore; profits grew reasonably, at about 18%, to Rs 1,286 crore in the same period. 

But just as defense stocks don’t surge with the news of conflict—real money is in long-term contracts—BEL’s share price, which has been on an upward climb this year, didn’t cross the one-year-high mark which analysts expected it to. 

The company’s order book is solid at Rs 74,453 crore, but the dynamics of the industry are changing, and changing fast. 

At the end of FY2025, the company reported its highest-ever export sales of $106 million, with its order book standing at nearly $350 million. Interpreting this as a strong cue of global market acceptance, the management has highlighted its “make and sell globally” as a major focus for the coming years. 

This strategy is not only in sync with New Delhi’s push to boost defense exports—which are targeted to increase from $2.8 billion in FY25 to $5.8 billion in FY29—but also acts as a cushion against its heavy reliance on the domestic defense sector, which accounted for as much as 94% of its turnover in FY25.