Synopsis : The Goldman Sachs sees a $120 billion domestic opportunity driven by localisation, rising capital expenditure, global supply chain shifts, and strong order books, positioning private defence manufacturers for sustained long-term growth.
Global brokerage Goldman Sachs has expressed optimism around India’s private defence sector at a time when the country’s military spending and localisation efforts are gaining momentum. With defence manufacturing emerging as a key strategic priority under initiatives like Make in India, private players are increasingly drawing investor attention amid rising order visibility and expanding export opportunities.
Strong Domestic Opportunity Backed by Policy Push
Goldman Sachs has reiterated its bullish stance on India’s private defence sector, citing a massive domestic opportunity of nearly $120 billion. The brokerage believes the government’s continued push toward self-reliance in defence manufacturing is increasingly tilting opportunities toward private-sector players. Despite limited headline announcements in Budget 2026, the structural growth story for private defence companies remains intact.
Key Growth Catalysts Driving Optimism
The brokerage’s positive outlook is supported by three major tailwinds. First, the FY27 defence capital procurement of 18 percent year-on-year, strengthening order inflows for domestic manufacturers. Second, the recently announced US–India trade deal is expected to enhance defence collaboration. Third, the proposed EU–India Free Trade Agreement could further integrate Indian companies into global supply chains. Additionally, the ongoing China+1 shift is likely to position Indian firms as preferred alternatives for global OEMs.
Top Private Defence Picks
Solar Industries India Limited
Solar Industries India Limited is a Nagpur-based company founded in 1983 that manufactures and sells industrial explosives, explosive initiating systems, and defence products in India and overseas. Its portfolio includes bulk and packaged explosives, electronic and non-electric detonators, boosters, detonating cords, and related accessories used in mining, infrastructure, construction, and space sectors, along with defence offerings such as drones, ammunition, high-energy materials, rockets and missiles, bombs and warheads, chaffs and flares, and mine devices.
With a market capitalization of Rs. 1,20,424.17 crore, the shares of Solar Industries India Limited closed at Rs. 13,308, down by 0.46 percent from its previous day’s closing price of Rs. 13,370 per equity share.
Goldman Sachs has reclassified Solar Industries as a pure defence play, highlighting its strong presence in ammunition and drone manufacturing. The brokerage believes the company is well positioned to benefit from rising domestic defence procurement and increasing private-sector participation.
Azad Engineering Limited
Azad Engineering Limited is a Hyderabad-based company incorporated in 1983 that manufactures precision-engineered components for aerospace, defence, energy, and oil & gas industries in India and globally. Its portfolio includes complex airfoils and blades for aircraft engines and APUs, turbine and nuclear power components, aerospace actuator systems, fluid distribution parts, and critical rotating and structural components used in combustion, hydraulics, propulsion, and flight control systems, serving civil aircraft, defence missiles, spaceships, nuclear and thermal power, hydrogen, gas power, and oil & gas applications.
With a market capitalization of Rs. 11,085.46 crore, the shares of Azad Engineering Limited closed at Rs. 1,716.50, up by 1.12 percent from its previous day’s closing price of Rs. 1,697.50 per equity share.
Azad Engineering is recognised as a key supplier of complex machined components to global aerospace OEMs. Goldman Sachs sees the company gaining from the China+1 shift and deeper integration of Indian firms into global aerospace and defence supply chains.
PTC Industries Limited
PTC Industries Limited is a Lucknow-based company incorporated in 1963 that manufactures and exports high-precision metal castings to global OEMs, catering to aerospace, defence, space, marine, energy, and industrial sectors. The company works with advanced materials such as alloy and stainless steels, duplex and super duplex steels, nickel- and cobalt-based alloys, nickel aluminium bronze, and heat- and creep-resistant steels, and utilizes proprietary and licensed processes including RepliCast, RapidCast, and ForgeCAST.
With a market capitalization of Rs. 26,533.81 crore, the shares of PTC Industries Limited closed at Rs. 17,698, up by 0.13 percent from its previous day’s closing price of Rs. 17,675 per equity share.
PTC Industries is emerging as a critical supplier of processed materials, particularly aerospace-grade titanium. Goldman Sachs believes its specialised capabilities position it strongly to benefit from higher defence capital expenditure and global outsourcing opportunities.
Data Patterns (India) Limited
Data Patterns (India) Limited is a Chennai-based company incorporated in 1998 that provides integrated defence and aerospace electronics solutions in India. It designs and manufactures measuring, testing, navigation and control equipment, along with radar systems, electronic warfare systems, avionics, RF and microwave products, space systems, naval systems, communication systems, cockpit displays, launch and fire control systems, and high-speed processors, among others.
With a market capitalization of Rs. 16,632.84 crore, the shares of Data Patterns (India) Limited closed at Rs. 2,971, up by 1.96 percent from its previous day’s closing price of Rs. 2,914 per equity share.
Data Patterns stands out for its leadership in radar electronics and defence systems. The brokerage expects the company to benefit from increased focus on indigenous defence electronics and advanced system integration.
Astra Microwave Products Limited
Astra Microwave Products Limited is a Hyderabad-based company incorporated in 1991 that designs, develops, and manufactures radio frequency and microwave sub-systems for defence, space, meteorology, telecommunications, and civil applications. Its portfolio includes radar electronics, electronic warfare systems, telemetry and strategic electronics, satellite and ground-based systems, weather radars, navigation systems, and homeland security products, with exports to international markets.
With a market capitalization of Rs. 8,535.56 crore, the shares of Astra Microwave Products Limited closed at Rs. 899, down by 1.16 percent from its previous day’s closing price of Rs. 909.55 per equity share.
Astra Microwave remains a preferred pick due to its role in advanced subsystems and defence electronics. Goldman Sachs views it as a beneficiary of rising procurement and localisation trends in high-value defence components.
Risks Around Engine Development
While the long-term outlook remains strong, Goldman Sachs has flagged caution around the proposed co-development of a 110–120 kN high-thrust turbofan engine with SAFRAN for the AMCA program. The project could require up to $20 billion in investment and represents a complex, long-gestation challenge, even though draft DAP 2026 aims to reduce procurement timelines.
Long-Term Visibility Remains Strong
Despite these risks, the brokerage highlights that robust order books stretching till 2035 provide multi-year revenue visibility for Indian defence component manufacturers. Overall, Goldman Sachs believes structural policy support, rising capital allocation, and global supply chain realignment make India’s private defence stocks an attractive long-term investment theme.
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