# Indian defence stocks face margin challenges in Q2 FY27

> Kotak predicts Indian defence stocks will see revenue growth but margin pressures from project mix and execution.
- Title: Indian defence stocks face margin challenges in Q2 FY27
- Summary: Kotak predicts Indian defence stocks will see revenue growth but margin pressures from project mix and execution. Kotak expects Indian defence stocks to…
- Keywords: indian defence stocks, revenue growth, margin pressures, q2 fy27, kotak institutional equities, bel, hal, mdl, solar industries, india, defence, Indian
- Source: Financialexpress — https://financialexpress.com/business/defence/revenue-growth-vs-margin-realities-what-to-expect-from-indian-defence-stocks-in-q2-fy27/4358819
- Author: Ajay Joseph
- Published: 2026-10-11T17:40:07+00:00
- Read time: 2 min
- Topics: indian defence stocks, revenue growth, margin pressures, q2 fy27, kotak institutional equities, bel, hal, mdl, cs, solar industries, india, defence
## Revenue growth vs margin realities
Kotak expects Indian defence stocks to report healthy revenue growth in Q2 FY27 but margin pressures from project mix and execution.
## Kotak's Q2 FY27 outlook
Kotak Institutional Equities forecasts revenue growth for BEL, HAL, and Solar Industries while MDL and CSL face different margin dynamics.
## INDO-MIM: Margin contraction
Kotak expects INDO-MIM to report 3% sequential revenue growth but EBITDA margin decline to 30% from 33.4% in previous quarter.
## Aequs: Rapid growth and margin improvement
Aequs projects 56.3% year-on-year revenue growth to Rs 4.4 billion with EBITDA margin rising to 5.6% from 3.7%.
## BEL: Revenue and margin trends
BEL reports 16% year-on-year revenue growth to Rs 67.2 billion with EBITDA margin at 28.9%.
## HAL: Delivery-driven growth
HAL expects 14% year-on-year revenue growth to Rs 75.6 billion with EBITDA margin at 26.1%.
## Solar Industries: Defence revenue surge
Solar Industries forecasts 47.3% year-on-year revenue growth to Rs 30.7 billion with defence segment growth at 120%.
## MDL: Project execution focus
MDL projects revenue flat year-on-year at Rs 29.5 billion with EBITDA margin at 16.1% driven by P17A frigates and P15B destroyers.
## CSL: Order-driven growth
CSL reports 11.4% year-on-year revenue growth to Rs 10.6 billion with EBITDA margin at 16.7%.
## Project mix impacts margins
Kotak notes project mix and execution schedules determine margin dynamics for MDL and CSL, with timely order awards critical for growth.
## Defence capital expenditure growth
Defence capital expenditure grew 37% year-on-year in first five months of FY27 with acceptance of necessity approvals exceeding Rs 1.6 lakh crore.
## Key drivers for FY29 growth
Timely Cabinet Committee on Security clearances for programmes like QRSAM and Project 75(I) submarines are critical for converting pipeline into orders.
## Key takeaway

Kotak expects Indian defence stocks to report revenue growth in Q2 FY27 but margin pressures from project mix and execution.