PSU majors drive Q1FY26 defence earnings in a soft quarter but analysts continue to flag high valuations

The Nifty Defence Index shows a forward P/E of 43.7, down from over 60 in FY25, as Indian defence firms report steady Q1FY26 earnings. PSU companies like BEL, HAL, and BDL performed well, with BEL's profit up 23% and BDL's soaring 154%. However, private firms faced challenges, with mixed results. Analysts note strong PSU order books but caution about high valuations, emphasizing the need for operational efficiency among private players. Despite solid fundamentals, the elevated valuations remain a concern for investors.