HAL, BEL, L&T, KEI Among Jefferies’ Top Bets; Brokerage Picks Defence & Power Stocks Amid India Capex Boom

India's rising capital expenditure (capex) cycle is creating significant opportunities in defence and power equipment, with global brokerage Jefferies identifying these sectors as its top investment themes.

Citing strong order books, improving project execution and better operating leverage, the brokerage has raised target prices for several companies, including KEI Industries, Thermax, Data Patterns (India) and CG Power, while maintaining a cautious outlook on Bharat Heavy Electricals Ltd (BHEL).

Jefferies Picks Defence and Power Stocks: Raises Targets on KEI, Thermax, Data Patterns, CG Power

Jefferies believes defence and power equipment companies are among the biggest beneficiaries of India's next growth phase, supported by government infrastructure spending, rising electricity demand, defence modernisation and a healthy pipeline of projects.

HAL, BEL, Siemens Energy, L&T Among Jefferies' Preferred Bets

The brokerage's top picks in the industrial space include Siemens Energy India, Hitachi Energy India, Hindustan Aeronautics Ltd (HAL), Bharat Electronics Ltd (BEL), KEI Industries and Larsen & Toubro (L&T), which it believes offer strong earnings visibility backed by robust order inflows.

KEI Industries Target Raised; Jefferies Sees 25% Upside; Should You Buy? Check CMP

Jefferies retained its 'Buy' recommendation on KEI Industries and increased its target price to Rs 6,670 from Rs 6,000, indicating a potential upside of nearly 25 percent. The brokerage views the company as a comprehensive play on multiple growth themes, including power infrastructure, private capex, housing demand and export opportunities.

Thermax Target Price Raised to Rs 5,930; Jefferies Maintains 'Buy' Rating on Strong Order Growth

For Thermax, Jefferies maintained a 'Buy' rating and raised the target price to Rs 5,930 from Rs 5,390, citing stronger industrial activity and improving order inflows. The brokerage highlighted that demand for boilers, turbines and generators remains a key driver for the company's future growth.

Data Patterns Gets Higher Target From Jefferies; Maintains 'Buy' Rating

Data Patterns (India) also continued to feature on Jefferies' 'Buy' list, with the target price revised upwards to Rs 4,875 from Rs 4,500. The brokerage expects the defence electronics company to benefit from increasing domestic defence spending and opportunities linked to the Multi-Role Fighter Aircraft programme.

Should You Buy, Sell or Hold CG Power Stock? Jefferies Hikes Target

Jefferies retained its 'Hold' rating on CG Power and Industrial Solutions and raised its target price to Rs 840 from Rs 745. The brokerage highlighted healthy momentum in the company's power systems business, supported by strong transmission demand and fresh orders, including a transformer order from a US data centre.

Jefferies Raises BHEL Target Price but Maintains Cautious 'Underperform' Rating

However, BHEL remained the only stock with an 'Underperform' rating in Jefferies' industrial coverage. Although the brokerage increased its target price to Rs 220 from Rs 185, it expressed concerns over weaker order inflows and lower-than-expected earnings in FY26.

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