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Four defence stocks that are reacting to Q4 results, management commentary on MondayFor financial year 2026, Data Patterns aspires to grow its topline between 20% to 25%, and margins between 35% to 40%. It also plans to maintain its net debt free status and maintain its topline growth over the next two to three years.By Hormaz Fatakia   May 19, 2025, 9:46:23 AM IST (Updated)3 Min ReadFour defence companies, Hindustan Aeronautics Ltd. (HAL), Data Patterns Ltd., Zen Technologies Ltd. and Bharat Electronics Ltd. (BEL) gained up to 6% on Monday, May 19, due to various factors.

Shares of HAL, which reported earnings last week, are down over 2.5%, after the management projected 8-10% earnings growth in financial year 2026.

Besides HAL, shares of Zen Technologies are locked in another upper circuit of 5% after the management is expecting its revenue to grow at a Compounded Annual Growth Rate of 50% over financial year 2026-2026.

Shares of Data Patterns are off opening highs, having gained as much as 6% in response to its fourth quarter results.

Bharat Electronics, or BEL, the Nifty 50 constituent, will be reporting results later today.

The management of HAL in its earnings call on Friday evening, projected its revenue growth in financial year 2026 to be between 8% to 10%. It said that the guidance will be revisited after six months, adding that while they expect double-digit revenue growth from financial year 2027, it could happen this year itself.

Over the next three to four years, HAL intends to maintain its adjusted EBITDA margin at 31%.

Motilal Oswal has raised its price target on HAL to ₹5,650 and reiterated its "buy" recommendation on the stock. It said that while they remain constructive on the overall defence space, the recent rally has been too sharp. Acknowledging that risk-reward is not favourable this point, Motilal Oswal wrote in its note that it awaits better entry points.

Zen Technologies reported revenue growth of 130% from the same quarter last year to ₹325 crore during the January-March period. Its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased by 174% year-on-year to ₹138 crore, while margins expanded by nearly 7 percentage points to 42.5%.

As of March 31, the company had a total order book size of ₹691 crore, with training simulators comprising 73% of that, while the rest belonged to anti-drone systems.

The company also crossed its financial year 2025 topline guidance of ₹900 crore, EBITDA margin guidance of 35% and net profit margin guidance of 25%.

Data Patterns also saw its topline double from the same period last year during the March quarter, growing by 117% to ₹396 crore. Its EBITDA went up by 61% from last year, but margins were under pressure.

For the full year, the company surpassed its revenue growth guidance of 20-25%, with a 36% growth. However, its order inflow guidance was a miss at ₹355 crore, compared to projections between ₹700 crore and ₹800 crore.

Over the next 18-24 months, Data Patterns has a strong order book pipeline of up to ₹3,000 crore.

For financial year 2026, Data Patterns aspires to grow its topline between 20% to 25%, and margins between 35% to 40%. It also plans to maintain its net debt free status and maintain its topline growth over the next two to three years.

"Among Defence stocks, we would prefer some Broadway plays, if you are, if one is buying a particular company, targeting a particular segment that will go through its own ebbs and flows and huge amount of volatility. For us, it's really important to get the returns but also manage the risk," Rana Gupta of Manulife Investment Management told CNBC-TV18 last week.

"Rising defence expenditure and localisation is not just in India but a global theme, so we would continue to see that going on. And our take would be buy the one that is more diversified and has exposure to multiple segments," he added.

India's defence stocks had a stellar run last week, with stocks like Cochin Shipyard and Mazagon Dock surging up to 40%. Names like HAL and Data Patterns also saw their respective stocks rise between 18% and 20% during the week.

(With Inputs From Rhea Bhatia.)Continue ReadingFirst Published: May 19, 2025 4:49 AM ISTCheck out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!TagsBharat Electronics Limited (BEL)Data Patterns share pricedefence stocksHindustan Aeronautics Limited (HAL)Mazagon Dockshare market todayZen Technologies