HAL vs Bharat Dynamics vs Mazagon Dock Q1 Results 2025: Which Defence PSU Stock is Best to Buy
Q1 2025 results season has highlighted India’s defence PSUs. Amid geopolitical tensions, HAL, BDL, and MDL are in focus for investors.
HAL Q1 results show steady growth, BDL faces softer Q1, while MDL sees profit pressure. Experts decode which defence PSU stock to buy now.
HAL vs Bharat Dynamics vs Mazagon Dock Shipbuilders: Which Defence PSU Stock Looks Strong After Q1 Results 2025
The Q1 FY25 results season has provided key insights into India’s defence PSUs. With growing geopolitical tensions, trade war concerns, and rising defence budgets, investors are increasingly eyeing defence stocks as potential long-term compounders. Among the top picks are Hindustan Aeronautics Limited (HAL), Bharat Dynamics Limited (BDL), and Mazagon Dock Shipbuilders Limited (MDL).
In this article, we provide a detailed comparative analysis of HAL, BDL, and MDL’s latest results, expert views, and technical outlook to help investors make an informed decision.
Operational Highlights
According to analysts, HAL has shown steady operational progress in Q1 2025. The company’s key challenge lies in the GE engine supply for the Tejas programme, which could impact execution timelines. However, HAL’s diversified portfolio — including LCH Prachand, Su-30 upgrades, civilian aircraft, and space programmes — ensures that its financials remain resilient.
Order Book Strength
HAL boasts an order book worth ~6.1x FY25 revenues, making it one of the most secure defence plays. This backlog provides multi-year revenue visibility.
Valuation & Outlook
- Valuations have become attractive post the recent correction.
- Execution timelines for large orders remain crucial.
- Analysts believe HAL is well-placed as a steady long-term compounder.
Bharat Dynamics Q1 Results Review
Performance Snapshot
BDL delivered softer-than-expected Q1 FY25 numbers, but experts remain optimistic about its future.
Growth Drivers
- Multiple programmes entering production phase: QRSAM, MRSAM, Akash NG, ATGMs, Torpedoes.
- Strategic monopoly as India’s only missile system integrator.
- Strong order book of ~6.8x FY25 revenues.
- Expectation of ₹200 billion in fresh orders over the next 2 years.
Outlook
Despite a weak quarter, BDL’s strong order pipeline and monopoly in missile integration provide exceptional revenue visibility. It is seen as a tactical addition for investors looking at near-to-medium-term opportunities.
Mazagon Dock Q1 Results Review
Q1 Performance
MDL reported net profit down 35% YoY and EBITDA margin contraction due to higher procurement and manpower costs.
Long-Term Strength
- Between FY21–FY24: Revenue grew at ~33% CAGR, Net profit at ~47% CAGR.
- Industry-leading ROE ~27% and ROCE ~33%.
- Debt-free balance sheet enables self-funded expansion.
Strategic Initiatives
- Nhava dry dock facility to double shipbuilding capacity.
- Proposed majority stake in Colombo Dockyard to expand exports.
- Robust order pipeline in submarines, destroyers, and frigates.
Outlook
While FY26 may see margin volatility, MDL’s capacity expansion, export diversification, and operational leverage position it strongly for long-term growth.
Comparative Analysis: HAL vs BDL vs MDL
| Parameter | HAL | Bharat Dynamics | Mazagon Dock |
|---|---|---|---|
| Q1 Performance | Stable with order book strength | Softer-than-expected but long-term growth intact | Weak due to margin pressures |
| Order Book | ~6.1x FY25 revenue | ~6.8x FY25 revenue | Strong naval order pipeline |
| Core Strength | Diversified portfolio (aircraft, upgrades, space) | Missile systems monopoly | Naval shipbuilding & submarines |
| Valuation Trigger | Execution of fighter orders | Fresh missile contracts | Capacity expansion & exports |
| Investment View | Long-term compounder | Tactical near-term pick | Long-term naval growth story |
Expert Recommendations
Fundamental View
- HAL: Strong, steady, and diversified — best for long-term investors.
- BDL: Good potential, tactical buy for near-term growth.
- MDL: Long-term structural story despite short-term margin pressures.
Technical Outlook (Shiju Kuthupalakkal, Prabhudas Lilladher)
- HAL looks technically strongest.
- Corrected from ₹5165 to support zone near ₹4315 (200-SMA).
- RSI indicates a positive trend reversal.
- Above ₹4670 (50-DEMA), stock can target ₹4940, ₹5170, ₹5700.
Future Outlook of Defence Stocks in India
- Rising Defence Spending: Government’s push for indigenisation will benefit HAL, BDL, and MDL.
- Export Opportunities: MDL’s Colombo Dockyard stake and HAL’s global aircraft upgrades open international markets.
- Technological Edge: BDL’s missile monopoly gives it a unique positioning.
- Execution Risk: Engine supply delays (HAL) and cost volatility (MDL) remain short-term challenges.
Which Stock Should You Buy?
- HAL: Best positioned as a steady compounder with diversification and a large order book.
- BDL: Tactical play with high upside in missile contracts.
- MDL: Long-term value story with naval dominance and global expansion plans.
👉 For long-term investors, HAL stands out as the most stable pick. For those seeking medium-term tactical opportunities, BDL looks attractive, while MDL offers a long-term structural growth story despite near-term margin pressures.
FAQs
1. Which is the best defence PSU stock after Q1 2025?
HAL is considered the strongest long-term pick, while BDL and MDL also offer attractive opportunities depending on investment horizon.
2. Is HAL a buy after Q1 2025 results?
Yes, HAL has a strong order book, diversified portfolio, and attractive valuations post-correction.
3. Why did Mazagon Dock profits fall in Q1 FY26?
Due to higher procurement and manpower costs, which impacted margins.
4. Is BDL’s growth sustainable?
Yes, with ~₹200 Bn in fresh orders expected and multiple missile programmes moving into production.
5. What are the future triggers for defence PSUs?
- Higher government defence spending
- Export opportunities
- New project execution
- Strategic partnerships
