Why Is Goldman Sachs Focusing on Solar Industries, Astra Micro and PTC India in Defence?
Defence has emerged as one of the most dynamic themes in India’s equity markets, with strong government support, rising budget allocations, and increasing private sector participation. Goldman Sachs has recently shared its views on select defence-linked stocks, highlighting factors such as asset turns, return on equity (ROE), and earnings visibility. The brokerage’s note singles out Solar Industries, Astra Microwave (Astra Micro), and PTC India as important names to watch in the evolving sector landscape.
About the Defence Sector Coverage
India’s defence push is centered around indigenisation and reduced dependence on imports. Listed players in explosives, missile sub-systems, electronics, and power trading have become key beneficiaries of policy reforms. Brokerage research, especially from global firms like Goldman Sachs, provides valuable direction for institutional investors evaluating these long-term growth opportunities.
Solar Industries: Asset Efficiency Leader
✅Goldman Sachs views Solar Industries as having the best asset turns compared to peers, making it a clear efficiency leader in the defence space. Goldman Sachs assigns a target price of ₹18,215 to Solar Industries, signaling strong upside potential driven by capacity expansion and defense contracts.
The company, known for its explosives and ammunition, has scaled both domestic and export markets. Its ability to generate superior asset productivity supports a higher ROE trajectory compared to other players in the sector. Investors see it as a structural beneficiary of India’s defense indigenisation strategy.
Astra Micro: Margin Expansion Ahead
💡Astra Microwave is expected to witness ROE improvement, aided by better profit margins and lower capex intensity going forward. Goldman Sachs values Astra Micro at ₹1,455, banking on improved margins and increasing defence indigenization.
The company is a key supplier in radar and electronic warfare systems. As margins improve and capital expenditure moderates, Astra Micro could deliver stronger returns to shareholders. Reduced capex burden also allows free cash flows to improve, enhancing long-term investment appeal.
PTC India: Long-Term ROE Growth
📈PTC India is projected to see its ROE rise to over 30% by FY28E, according to Goldman Sachs estimates. Goldman Sachs sets a bullish target of ₹24,725 for PTC India, supported by its expanding role in energy trading and long-term defence infrastructure demand.
As India strengthens its energy and power infrastructure with a defence-aligned dimension, PTC India’s trading business could benefit from policy shifts and higher demand for reliable energy management. The strong ROE outlook gives investors a medium-to-long-term growth case.
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Valuation and Sector Sentiment
💰Valuations across defence stocks have expanded significantly in recent years, with investor appetite driven by structural tailwinds.
Goldman Sachs notes that while certain stocks trade at elevated multiples, the earnings trajectory, policy support, and visibility into long-term orders support selective investment. However, investors should remain mindful of execution risk and global supply chain volatility.
Investor Takeaway
Goldman Sachs’ coverage underscores the strength of India’s defence growth story while highlighting the unique strengths of Solar Industries, Astra Micro, and PTC India. Each company offers a differentiated investment angle—efficiency, margin expansion, and rising ROE respectively. For investors, the key lies in balancing growth optimism with valuation discipline and monitoring execution trends.
Find more defence stock insights and market updates at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
