
Dinshaw Irani, CEO of Helios Capital, has expressed a clear preference for Bharat Electronics Ltd (BEL) as his top pick in the defence sector. In an interaction with Business Today on Thursday, Irani explained why his fund is staying away from hardware-heavy defence firms. "BEL is a defence electronics company. It's not involved in manufacturing large hard assets like ships or aircraft," Irani said. "Such manufacturing requires a lot of time and capital to expand. For example, Hindustan Aeronautics Ltd (HAL) depends heavily on the US for engine supply and that makes us uncomfortable."
He also pointed out that companies manufacturing hard assets were trading at very high valuations, which made them unattractive. "We found their premiums to be too exorbitant," he said.
In contrast, Irani believes BEL offers a more flexible and cost-efficient opportunity. "Setting up a new line is relatively simple for BEL. They don't have to worry about massive capex. Plus, they are agnostic – they can supply to the Army, Navy or Air Force as required," he stated.
BEL's scope beyond traditional defence applications also impressed Irani. "They have the potential to diversify into drones and other electronics. And India could very well become a global outsourcing base for defence electronics in the future," he added.
Irani also voiced concerns about HAL's performance, especially after Air Chief Marshal Amar Preet Singh publicly criticised delays in delivering Tejas Mk1A fighter jets. Singh, speaking at the CII Annual Business Summit 2025, stressed the need for accountability, stating, "Once a timeline is given, not a single project I can think of has been delivered on time."
Despite acknowledging the potential of shipbuilding in India, Irani said current valuations in that segment are too high to consider investing right now. "The shipbuilding space may emerge as a winner, but at the moment, the valuations are too stretched for our comfort," he said.
With its strong fundamentals, lean capex needs and diversified reach, BEL continues to be Helios Capital's preferred bet in India's evolving defence landscape.