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Posted on  May 9, 2025 under  by Divyansh Shah

10 Best Defence Stocks in India 2025

India’s defence sector is undergoing a strategic transformation driven by rising geopolitical tensions, increased government spending, and a strong push for indigenous manufacturing under the ‘Make in India’ initiative. This has created significant investment opportunities for those looking to capitalise on the country’s military modernisation and self-reliance goals.

Defence stocks in India include companies involved in manufacturing fighter aircraft, missiles, radar systems, electronics, and specialised equipment for the armed forces. With the Indian government allocating over ₹6.22 lakh crore in the 2024–25 Union Budget for defence, the sector offers strong long-term growth potential.

Defence Stocks List in India 2025

Below is a well-researched list of defence companies in India, ranked broadly by their market capitalisation. These companies play a key role in manufacturing and supplying critical equipment and technologies to India’s armed forces.

Here’s the updated defence stocks list in India for 2025:

  • Hindustan Aeronautics Ltd. (HAL)
  • Bharat Electronics Ltd. (BEL)
  • Solar Industries India Ltd.
  • Mazagon Dock Shipbuilders Ltd.
  • Bharat Dynamics Ltd. (BDL)
  • Bharat Forge Ltd.
  • Cochin Shipyard Ltd.
  • Kaynes Technology India Ltd.
  • Data Patterns (India) Ltd.
  • Astra Microwave Products Ltd.
  • Paras Defence and Space Technologies Ltd.
  • PTC India Ltd.
  • MTAR Technologies Ltd.
  • DCX Systems Ltd.
  • Skanray Technologies Ltd. (Svante)
  • Avantel Ltd.
  • Premier Explosives Ltd.
  • Ideaforge Technology Ltd.
  • NIBE Ltd.

Top 10 Defence Stocks in India 2025

If you're looking to invest in India's booming defence sector, here's a curated defence stocks list featuring the top-performing companies based on their 3-year returns. These stocks have shown strong growth, backed by government contracts, military modernisation, and self-reliant manufacturing initiatives.

These defence stocks have outpaced broader market indices, making them attractive for investors seeking long-term growth in a strategically vital sector.

Overview of Best Defence Stocks in India

India's defence sector is growing rapidly, with various companies playing critical roles in the country's push for self-reliance. Here’s a list of the best defence stocks in India that offer excellent growth potential and strong market performance.

1. Mazagon Dock Shipbuilders Ltd.

Mazagon Dock Shipbuilders is one of the most significant defence stocks in India, specialising in the construction of warships, submarines, and other naval vessels for the Indian Navy. The company is pivotal in India’s naval defence capabilities and has seen remarkable growth in recent years.

  • CMP: Rs 2922
  • Market Cap: 117868Cr
  • PE: 41.35
  • ROCE: 35.66%

Returns: 

1Y Return (%)3Y Return (%)5Y Return (%)
164.171973.373298.46
Note: Data as of 09/05/2025

2. Cochin Shipyard Ltd.

Cochin Shipyard is another key player in the Indian defence sector, involved in building and repairing ships for the Indian Navy and commercial vessels. The company also manufactures offshore platforms and offers shipbuilding solutions. Cochin Shipyard's strategic importance has only grown as India seeks to modernise its maritime forces.

  • CMP: Rs 1484.60
  • Market Cap: 39057 Cr
  • PE: 47.55
  • ROCE: 19.98%

Returns: 

1Y Return (%)3Y Return (%)5Y Return (%)
20.24825.681134.59
Note: Data as of 09/05/2025

3. Kaynes Technology Ltd.

Kaynes Technology has carved a niche for itself in the defence sector by providing integrated solutions in aerospace, defence, and electronics. With a focus on R&D and innovation, Kaynes Technology supplies critical defence electronics and components that are essential to the defence infrastructure.

  • CMP: Rs 5665.50
  • Market Cap: 36265 Cr
  • PE: 140.14
  • ROCE: 11.27%

Returns: 

1Y Return (%)3Y Return (%)5Y Return (%)
131.27721.15NA
Note: Data as of 09/05/2025

4. Premier Explosives Ltd.

Premier Explosives is a leading supplier of explosives and pyrotechnic products to the Indian armed forces. The company’s product portfolio includes ammunition and explosives, which are used extensively in defence applications.

  • CMP: Rs 479.50
  • Market Cap: 2578 Cr
  • PE: 68.17
  • ROCE: 19.83%

Returns: 

1Y Return (%)3Y Return (%)5Y Return (%)
6.44606.393229.86
Note: Data as of 09/05/2025

5. Hindustan Aeronautics Ltd. (HAL)

Hindustan Aeronautics is one of India’s premier aerospace companies, involved in the design, development, and production of fighter aircraft, helicopters, and other aviation systems for the Indian armed forces. HAL is a critical component of India’s defence sector, contributing significantly to the country’s air defence capabilities.

  • CMP: Rs 4501.20
  • Market Cap: 301029 Cr
  • PE: 34
  • ROCE: 24.56%

Returns: 

1Y Return (%)3Y Return (%)5Y Return (%)
17.02474.621712.44
Note: Data as of 09/05/2025

6. Bharat Dynamics Ltd. (BDL)

Bharat Dynamics is a leader in the defence manufacturing sector, particularly in the production of guided missiles, torpedoes, and other ammunition. As a key supplier to the Indian Defence Ministry, BDL’s future looks promising with the continued focus on strengthening India's missile capabilities.

  • CMP: Rs 1531.80
  • Market Cap: 56150 Cr
  • PE: 94.20
  • ROCE: 11.33%

Returns: 

1Y Return (%)3Y Return (%)5Y Return (%)
63.99365.411239.22
Note: Data as of 09/05/2025

7. Solar Industries India Ltd.

Solar Industries is one of the top players in the Indian defence sector, specialising in explosives and ammunition manufacturing. The company produces a wide range of products, from industrial explosives to military-grade munitions.

  • CMP: Rs 13487
  • Market Cap: 122044 Cr
  • PE: 105.66
  • ROCE: 30.00%

Returns: 

1Y Return (%)3Y Return (%)5Y Return (%)
54.79352.031440.67
Note: Data as of 09/05/2025

8. Bharat Electronics Ltd. (BEL)

Bharat Electronics is a leading defence electronics company in India, specialising in the development of radar systems, communication equipment, and other electronic systems for the Indian armed forces. The company plays a crucial role in modernising India’s defence infrastructure.

  • CMP: Rs 315.85
  • Market Cap: 230879 Cr
  • PE: 44.92
  • ROCE: 30.13%

Returns: 

1Y Return (%)3Y Return (%)5Y Return (%)
39.63320.181475.31
Note: Data as of 09/05/2025

9. Astra Microwave Products Ltd.

Astra Microwave Products is a leading manufacturer of microwave and communication systems for defence applications. The company’s primary focus is on the production of advanced radar, communication, and electronic warfare systems.

  • CMP: Rs 882.05
  • Market Cap: 8375 Cr
  • PE: 58.77
  • ROCE: 18.30%

Returns: 

1Y Return (%)3Y Return (%)5Y Return (%)
38.88269.141367.64
Note: Data as of 09/05/2025

10. Data Patterns Ltd.

Data Patterns is an emerging player in the Indian defence sector, providing innovative solutions in the field of aerospace and defence electronics. The company designs and develops state-of-the-art electronic systems and provides key solutions for India's defence needs.

  • CMP: Rs 2295.20
  • Market Cap: 12849 Cr
  • PE: 68.87
  • ROCE: 11.06%

Returns: 

1Y Return (%)3Y Return (%)5Y Return (%)
-19.43220.67204
Note: Data as of 09/05/2025

Best Small-Cap Defence Stocks in India

Small-cap defence stocks offer high-growth potential, especially in a rapidly expanding sector. These small-cap defence stocks in India significantly contribute to India's military modernisation, providing niche solutions and innovative technologies.

Best Small-Cap Defence StocksMarket Cap
1. NIBE Ltd1,819 Cr
2. Krishna Defence and Allied Industries Ltd.1,074 Cr
3. TAAL Enterprises Ltd.803 Cr
4. Taneja Aerospace & Aviation Ltd.734 Cr
5. Global Vectra Helicorp Ltd.288 Cr
Note: Data as of 09/05/2025

Why Invest in the Indian Defence Sector?

India’s defence sector is a pillar of national security and a major growth area for investors. The country has the third-largest military budget in the world, and this number continues to rise as India pushes for self-reliance in defence production. In the Union Budget 2024-2025, the government allocated ₹1.75 lakh crore to aerospace and defence manufacturing, a strong signal of the sector's future potential.

The defence industry is expected to grow significantly with an increasing focus on reducing imports and boosting indigenous production through initiatives like ‘Make in India’. Companies involved in aerospace, missile systems, and unmanned aerial vehicles are gaining substantial government contracts, making defence stocks a lucrative option for investors. By 2025, the Indian defence sector aims to achieve a turnover of ₹1.75 lakh crore, signalling long-term opportunities for growth.

What are Defence Stocks in India?

Defence stocks in India represent the shares of companies that manufacture and supply essential products and services to the Indian armed forces and allied sectors. These companies are involved in producing a variety of military equipment, including fighter jets, missiles, radars, drones, electronics, and protective gear—critical assets for national security.

The Indian defence sector has seen substantial growth in recent years, driven by the government’s push towards self-reliance through initiatives like ‘Make in India.’ The sector offers significant opportunities for investors as India’s defence budget continues to rise, with a strong emphasis on domestic production to reduce reliance on imports. With consistent growth in government spending, these stocks are expected to perform well in the long run, offering both stability and potential for high returns.

Investing in defence stocks provides an opportunity to align with India’s national security objectives while participating in the growth of one of the country's most vital sectors.

Best Defence Stocks in India

Factors to Consider Before Investing in Defence Stocks

Investing in top defence stocks in India requires careful evaluation of several key factors to ensure you make informed decisions. Here are the critical points to consider:

  • Government Spending Plans: The defence budget and purchase plans are key indicators of future demand for defence products.
  • Order Book Strength: A healthy order book with diverse and long-term projects shows a company’s future growth potential and demand stability.
  • Innovation and R&D Focus: Companies investing in research and development will stay competitive by introducing new and advanced technologies.
  • Export Potential: Companies with export capabilities can tap into global markets, boosting revenue and diversification.
  • Financial Health: Look for companies with strong revenue growth, low debt, and consistent profitability to ensure long-term stability.

How to Choose the Best Defence Stocks?

Selecting the best defence stocks involves understanding several critical aspects of the companies and the broader defence industry. Here are a few quick tips to guide your decision:

  • Company’s Product Portfolio: Look for companies offering diversified defence products, such as aerospace, missile systems, and electronics, as they are more resilient to market shifts.
  • Government Contracts: Focus on companies with long-term government contracts and partnerships. This provides stability and assures consistent revenue streams.
  • R&D and Innovation: Prioritize companies that are leaders in technological innovation, particularly in advanced defence systems like drones or missile technology.
  • Financial Performance: Ensure the company has strong financials, including stable revenue growth, positive cash flow, and manageable debt levels.
  • Global Exposure: Companies with a presence in international markets or strong export potential are often less reliant on domestic factors and have diversified growth opportunities.

How to Invest in the Best Defence Stocks in India?

Investing in the best defence stocks in India can be a strategic way to diversify your portfolio and benefit from the country’s growing focus on military modernization. At Lakshmishree, we make it easy for investors to explore and invest in top defence stocks. Here’s how you can begin:

  • Open a Demat Account: Sign up with Lakshmishree to open your Demat account.
  • Research Defence Companies: Use Lakshmishree’s advanced research tools to analyze the best defence stocks' financials and growth potential.
  • Place Orders Easily: Buy and sell shares through our intuitive platform, which provides real-time data to help you make informed decisions.

With Lakshmishree, you can invest confidently in India's top-performing defence stocks.

Implications of the Union Budget 2024-2025 on the Defence Sector

The Union Budget 2024-2025 has significantly improved India’s defence sector. The government continues to emphasise modernisation and self-reliance but with some key shifts in focus. Here are the main takeaways:

  • Total Defence Budget: The defence budget for 2024-2025 stands at ₹6.22 lakh crore, marking a 4.79% increase from last year. This includes ₹1.41 lakh crore for defence pensions, underscoring the government’s commitment to caring for its veterans.
  • Modernisation Efforts: The allocation for military modernisation is ₹1.72 lakh crore, reflecting a steady 6% increase from the previous fiscal year. This will fund projects like upgrading fighter jets and missile systems.
  • Innovation and Development: An additional ₹400 crore has been allocated to foster innovation through the ADITI scheme, promoting MSMEs and start-ups in the defence technology space.
  • Border Infrastructure: The Border Roads Organisation (BRO) has seen a 30% budget hike to ₹6,500 crore to enhance strategic infrastructure in regions like Ladakh and the Andaman & Nicobar Islands.
  • Indian Coast Guard: The Coast Guard’s budget has been increased to ₹7,651.8 crore, focusing on capital expenditures for acquiring fast-moving patrol vessels and advanced surveillance systems.
  • Defence Research and Development: The Defence Research and Development Organisation (DRDO) will receive ₹23,855 crore to accelerate innovation in defence technology, ensuring that India stays at the forefront of military advancements.

These budgetary allocations reflect the government’s balanced approach to strengthening its military while promoting innovation and infrastructure development. The consistent focus on modernisation offers strong growth prospects for defence stocks in India.

Best Defence Stocks in India

How Defence Sector Stocks Perform in Economic Downturns?

Defence sector stocks tend to be more resilient during economic downturns compared to many other sectors. This is because government spending on defence remains a top priority, regardless of economic conditions. While the sector is generally less impacted by market cycles, it can still experience delays in project execution or reduced government orders during periods of fiscal constraint.

Defence stocks offer a stable investment option, as the need for national security and military upgrades ensures continuous demand. However, they are not entirely immune to downturns, as budget cuts or shifts in government policy can influence company performance.

Risks Of Investing in Defence Stocks in India

Investing in defence stocks in India comes with its own set of risks, which should be carefully considered:

  • Dependence on Government Budgets: Defence companies rely heavily on government contracts, and any cuts in defence spending due to political or economic reasons can directly impact their revenues.
  • Ethical Considerations: Some investors may be concerned about investing in companies that are part of the military-industrial complex, given the nature of their products and services.
  • Cyclical Performance: Defence stocks may underperform during extended periods of peace as government spending priorities shift away from military investments to other sectors like infrastructure or healthcare.

Awareness of these risks will help investors make more informed decisions when considering defence stocks for their portfolio.

Conclusion

Investing in top defence stocks in India presents a strong opportunity for long-term growth, driven by the country’s growing defence budget, technological advancements, and the push for self-reliance under initiatives like ‘Make in India’. With a steady focus on military modernisation and expanding export capabilities, India’s defence sector is poised for continued expansion and innovation.

For those looking to diversify their portfolios with a stable, high-potential sector, defence stocks in India offer a unique opportunity to tap into the nation's strategic defence capabilities and future growth.

Frequently Asked Questions

  1. What are the best defence stocks in India?

    The best defence stocks in India to buy now include Hindustan Aeronautics Ltd., Bharat Dynamics, Mazagon Dock Shipbuilders, Bharat Electronics, and Kaynes Technology. These companies are leaders in the aerospace, defence electronics, missile systems, and shipbuilding sectors, backed by strong government support and a healthy order book.

  2. Is it safe to invest in defence penny stocks?

    Investing in defence penny stocks carries higher risk due to their volatility and limited market capitalisation. However, they can offer significant returns if the companies secure government contracts or tap into new markets.

  3. What are the top small-cap defence stocks?

    The best small-cap defence stocks in India include NIBE Ltd., Krishna Defence and Allied Industries Ltd., TAAL Enterprises Ltd., Taneja Aerospace & Aviation Ltd., and Global Vectra Helicorp Ltd.

  4. Are defence stocks a good investment?

    Yes, defence stocks are generally considered a solid investment, especially during periods of geopolitical tension or government military upgrades. They offer stable demand even during economic slowdowns due to continuous government spending on national security and modernisation.

  5. Should I invest in defence stocks for the long term?

    Yes, investing in defence stocks for the long term can be a wise decision as India's defence sector is expected to grow significantly due to government initiatives like 'Make in India'. Stocks like HAL and Bharat Dynamics offer stable growth potential over time.

  6. Which stocks rise in war?

    During conflicts, stocks in aerospace, weapons manufacturing, and missile systems typically rise. Companies like Hindustan Aeronautics Ltd. (HAL) and Bharat Dynamics Ltd. often see increased demand for military equipment, making them strong performers during wartime situations.

Disclaimer: This article is intended for educational purposes only. Please note that the data related to the mentioned companies may change over time. The securities referenced are provided as examples and should not be considered as recommendations.

Divyansh Shah

Written by Divyansh Shah

Divyansh Shah is a seasoned Risk Analyst with a deep-rooted understanding of financial markets and risk management strategies. With a keen eye for detail and a passion for data-driven insights, Divyansh has honed his skills in identifying and mitigating potential risks within complex financial environments.

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