Mazagon Dock vs Bharat Dynamics vs BEL: Which PSU Defence Stock to Buy After Q4 Results 2025?

Introduction: A Strong Year for Defence PSUs

India’s defence public sector undertakings (PSUs) have emerged as key players in the government’s Make in India initiative and increasing focus on indigenous defence manufacturing. Following the announcement of their Q4 FY25 results, investors are closely watching Mazagon Dock Shipbuilders, Bharat Dynamics Limited (BDL), and Bharat Electronics Limited (BEL) to assess which stock offers the best value and growth potential. Here's a deep dive into each company's financial performance, order book strength, analyst opinions, and long-term outlook.

Mazagon Dock Shipbuilders (MDL): Riding High on Execution Strength

Q4 FY25 Highlights:

• Revenue: ₹2,113 crore (YoY growth of 21%)

• Net Profit: ₹384 crore (YoY up by 27%)

• EBITDA Margin: 18.2%

• Order Book: Over ₹38,000 crore

Mazagon Dock, India's premier shipbuilding yard, reported a stellar Q4 performance. With robust execution on submarine and warship projects, the company saw healthy revenue growth and margin expansion. The rising focus on naval capabilities, especially amid geopolitical tensions, positions MDL advantageously.

Analyst View:
"Mazagon Dock has proven its project execution capabilities with timely deliveries. Its strong order book visibility and government push for naval modernization make it a compelling mid-term bet," said Ravi Batra, Senior Analyst at Prudent Securities.

Bharat Dynamics (BDL): Defence Missiles with a Growth Trajectory

Q4 FY25 Highlights:

• Revenue: ₹975 crore (YoY growth of 15%)

• Net Profit: ₹189 crore (YoY up 11%)

• EBITDA Margin: 22.6%

• Order Book: ₹21,500 crore

BDL, the missile manufacturing arm of India’s defence forces, maintained a steady growth pace in Q4. Profitability was strong, supported by consistent missile deliveries and higher indigenisation. The company has secured several export and domestic orders in FY25.

Analyst View:
"BDL's earnings were slightly below street expectations, but the long-term growth story remains intact due to its strategic relevance and upcoming product line. Export orders are a major trigger," stated Ruchika Mehta, Defence Sector Expert at ScripEdge.

Bharat Electronics Limited (BEL): A Technology-Driven Giant

Q4 FY25 Highlights:

• Revenue: ₹4,220 crore (YoY growth of 12%)

• Net Profit: ₹760 crore (YoY up 10%)

• EBITDA Margin: 20.1%

• Order Book: ₹69,000 crore+

BEL continues to lead the pack among PSU defence stocks with its diversification across radar systems, weapon systems, and electronics for all three defence services. Despite a marginal slowdown in YoY growth, the company maintained strong profitability and margins.

Analyst View:
"BEL’s diversified portfolio, strong R&D, and high return ratios keep it an evergreen stock in the defence basket. It remains a defensive pick for long-term investors," noted Amit Thakur, Portfolio Manager at Axis Securities.

Market Context: Favourable Tailwinds for Defence Stocks

India’s defence budget for FY25 saw a 13% rise, focusing heavily on local procurement. With global supply chains in flux and strategic threats evolving, the government is pushing for self-reliance in defence, which benefits PSUs like MDL, BEL, and BDL. The recent export approvals for missiles and electronic systems further expand addressable markets for these firms.

Moreover, the broader PSU rally and increasing foreign investor interest in Indian defence have lifted these stocks to new highs over the past year.

Investor Outlook: Which Stock to Buy Now?

Each of these PSU defence companies has its own merits:

• Mazagon Dock is the best choice for those betting on naval modernisation and shipbuilding, with a lean balance sheet and execution visibility.

• Bharat Dynamics offers a niche exposure to missiles and is a beneficiary of India's rising export ambitions in defence.

• BEL stands out as a tech-driven, fundamentally strong pick with strong institutional backing and stable earnings.

Valuation Note:

• BEL trades at ~24x FY26E EPS

• BDL trades at ~21x FY26E EPS

• MDL trades at ~18x FY26E EPS

Final Takeaway:
For value-oriented investors, Mazagon Dock appears slightly undervalued with growth visibility. For risk-averse, long-term holders, BEL remains the safest bet due to its size, stability, and order book strength. BDL is ideal for those seeking high beta exposure and export-led growth potential.

Conclusion

The Indian defence sector is in a structural uptrend, and PSU stocks are well-placed to benefit from policy, demand, and capability enhancements. While all three companies—Mazagon Dock, Bharat Dynamics, and BEL—have reported healthy Q4 FY25 numbers, stock selection should be based on investment goals, risk appetite, and sector exposure preferences.

As defence continues to be a priority sector, selective bets in these PSUs could deliver robust returns over the next 3–5 years.