Think of India’s armed forces as a body. One company provides most of the brain, while the other provides the wings. This is the easiest way to distinguish between Bharat Electronics (BEL) and Hindustan Aeronautics (HAL). Both companies are defence manufacturers and both attract a lot of attention when it comes to the defence budget. Let’s meet them one by one.
The brain: Bharat Electronics
Founded in 1954 as a defence public sector undertaking under the Ministry of Defence to meet the electronic needs of the Indian armed forces, Bharat Electronics is one of India’s leading defence public sector undertakings. The company has nine manufacturing units with the design and manufacture of radars, fire control systems, missile systems, communication and C4I systems, electronic warfare system and avionics. The company’s clients also include the Railways, Department of Telecommunication and Election Commission. Defence accounted for around 90% of revenue in FY 2022, with civilian work accounting for the remaining 10%. Anyone tracking the BEL share price is essentially tracking this electronics story.
The wings: Hindustan Aeronautics
Based in Bangalore, Hindustan Aeronautics was founded on December 23, 1940, with Walchand Hirachand as its founder. The company’s administrative control was transferred to the Ministry of Defence in January 1951. The company now is involved in the design, development and manufacture of aircraft and helicopters like HAWK, LCA and SU-30 MKI, DHRUV, CHETAK and LCH helicopters. Hindustan Aeronautics also designs, develops and manufactures engines, avionics equipment and spares for space programmes. The company’s clients include the Indian Air Force, Army, Navy and Coast Guard. In addition, the company exports to buyers such as Airbus and Boeing.
Comparing Side by Side
| BEL | HAL | |
| Founded | 1954 | 1940 |
| Listed | 1993, BSE | 2018, BSE and NSE |
| Core products | Radars, missiles, electronic warfare | Aircraft, helicopters, engines |
| Recent corporate action | 2:1 bonus in 2022 | Face value split, ₹10 to ₹5, in 2023 |
Corporate actions are important to understand when it comes to price charts. BEL announced a 2:1 bonus in 2022 and a 1:10 bonus in 2017. HAL split its face value and its shares have been quoted ex split since September 28, 2023. All of these affect old prices, so use adjusted figures when comparing HAL share price with BEL’s price.
What each is betting on
BEL wants to find new customers in new markets. The company is considering business development models such as OPEX, service contracts and Government owned, Company operated to expand its customer base. BEL also intends to expand its network of marketing offices beyond the six countries it currently operates in, with an eye on South East Asia, Europe, the Middle East, Africa and the Americas.
HAL expects the Indian defence market to continue to be its primary revenue source, led by LCA Mk1A, LCH, LUH and HTT-40. The company has installed new production lines for HTT-40 and LCA Mk1A. HAL also wants a larger presence in UAVs and civil maintenance work.
What these profiles don’t show
Company profiles do not show revenue, profit, order books or debt figures, which determine how a stock behaves. Always look at the latest results before buying or selling a stock. These are general observations and not financial advice.
Final thoughts
BEL and HAL both serve the needs of the defence sector, but they create very different products. One creates electronics that sense and communicate while the other creates planes that fly. Understand what each one is making, how each one generates revenue and what each one plans to do. Then, you can understand what is driving the price changes.
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