Hindustan Aeronautics Ltd. (HAL) and Bharat Electronics Ltd. (BEL), two Indian defense PSU companies, gave their respective shareholders outstanding returns amid a surge in PSU equities. Both defense PSUs have given their stockholders returns of more than 1,000% during the past five years. But in 2025, the BEL share price has increased by more than 40%, while the HAL share price has continued to be a great sell-on-rise stock.
This has raised questions about whether BEL shares are still in a bull market and whether the government's emphasis on and increased spending on defense and national security will keep driving up the price of BEL shares.

What is driving up the price of BEL shares?
"BEL's long-term journey is shaping into a strong compounding story as the company evolves from a defense electronics supplier into a critical pillar of India's modern warfare systems," stated Seema Srivastava, Senior Research Analyst at SMC Global Securities, highlighting the fundamentals driving BEL's share price. BEL enters a phase of structural, not cyclical, expansion with an order book of ₹75,600 crore and a clear sight of ₹27,000 crore in FY26 inflows (possibly ₹57,000 crore with QRSAM). A unique stability in defense production is highlighted by the company's confidence in achieving 15% revenue growth and maintaining EBITDA margins of 27% or higher.Seema Srivastava of SMC Global Securities explained why BEL's share price beat HAL's in 2025: "BEL benefits from shorter execution cycles and much broader product diversification across radars, electronic warfare, missile electronics, communication systems, and command-control platforms, whereas HAL's massive ₹2.5 trillion order book is tied to large and lumpy aircraft platforms. BEL's standing gets stronger as India moves toward electronic-centric warfare and increases defense indigenization."
Sachin Jasuja, Head of Equities and Founding Partner at Centricity WealthTech, compared the fundamentals of HAL and BEL, saying, "As of October 2025, BEL's order book is valued at approximately ₹74,000 crore, characterized by short-duration and recurring contracts."These contracts, which enable quicker execution schedules and more reliable revenue streams, usually involve missile systems, naval electronics, and electronic warfare items. HAL, on the other hand, has a larger but longer-gestation order book of around ₹1.89 trillion for FY25. Despite continuous efforts to improve indigenization, HAL's projects are capital-intensive and heavily rely on imported engines like the GE F414. "HAL vs BEL: Which better?" These shorter project cycles allow for faster order turnarounds, better revenue visibility, and consistent margin delivery, according to management commentary from BEL's most recent Q2 FY26 earnings. In order to support robust order inflows and expand its growth prospects, BEL is also aggressively pursuing export markets and expanding indigenization. In the meanwhile, even though HAL's aerospace initiatives are crucial and extensive, they inevitably require longer development times and larger capital expenditures. Jasuja continued.According to Sachin Jasuja, systemic vulnerabilities include BEL and HAL's heavy reliance on government directives, policy continuity, and defense budget allocations. However, BEL is fundamentally positioned for greater growth due to its smaller asset base and stronger revenue velocity. Even though BEL now commands a higher value, this premium is largely justified by its robust R&D pipeline, growing product portfolio, and operational leverage.
Seema Srivastava predicted that the trend will continue, saying, "BEL offers a more scalable and predictable compounding runway, but HAL will remain a scale giant." The price of BEL shares has the potential to surpass HAL shares on percentage returns and become a long-term multibagger in the defense sector thanks to margin stability, growing exports, strengthening R&D, and an increased involvement in India's strategic programs.

Is BEL on steroids as the next HAL?
In response to the question of whether BEL is the next HAL on steroids, Sachin Jasuja stated, "It may be somewhat exaggerated to label BEL as the 'next HAL on steroids,' given that both companies operate in distinct yet complementary niches within the Indian defense ecosystem. BEL already commands a ₹3 lakh crore market cap with slightly rich valuations and a larger base." Nevertheless, BEL's efficient operations, short-cycle order book, and strategic emphasis on technology-intensive defense electronics keep it appealing as a possible growth candidate, particularly as its export aspirations gain momentum in the face of a shifting geopolitical landscape that is fueling rising defense spending in the majority of nations.