Defence stocks represent companies designing, developing, manufacturing, and supplying equipment, vehicles, weapons, and technology for military and national security. These companies benefit from government contracts and increased defence spending. Defence stocks offer a unique investment opportunity due to their strong ties to government spending and the critical nature of national security. In this blog, we’ll look into the details of the top 10 defence stocks to invest in 2025.
What are Defence Stocks?
Defence stocks represent shares in companies involved in manufacturing products and services for military and defence purposes. These companies produce everything from advanced weaponry and aircraft to cybersecurity solutions and surveillance systems.
Government contracts heavily influence the defence industry, which provides stability and long-term growth potential for these companies. Investors are often drawn to defence stocks because they tend to perform well during geopolitical tension and government spending on national security.
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Top 10 Defence Stocks to Invest in 2025
The defence sector significantly contributes to the Indian economy, with a growing demand for equipment and services. Here are the top 10 defence stocks to invest in 2025:
- Hindustan Aeronautics Ltd
- Bharat Electronics Ltd
- Mazagon Dock Shipbuilders Ltd
- Solar Industries India Ltd
- Bharat Dynamics Ltd
- Cochin Shipyard Ltd
- Garden Reach Shipbuilders & Engineers Ltd
- BEML Ltd
- Data Patterns (India) Ltd
- Zen Technologies Ltd
Overview of Best Defence Stocks to Invest in India
The Indian defence sector offers various companies catering to various military needs. Here’s an overview of the top ten prominent players to consider for potential investment in 2025:
1. Hindustan Aeronautics Ltd
HAL, incorporated in 1940, is a Maharatna CPSE that designs and manufactures aircraft, avionics, MRO, helicopters, and civil aviation systems. Its key products for the Indian Army are Tejas and the Light Utility Helicopter. The company’s order book increased to ₹1,84,000 crores in FY25, up 95.47% from the opening order book of ₹94,129 crores.
2. Bharat Electronics Ltd
Established in 1954, BEL is a Navratna PSU that is into the business of manufacturing defence communication products, rail & metro systems, cybersecurity products, and provides EDM services as well. Its key products are radar, C41 communication systems, and electro-optic systems. It has 9 manufacturing facilities in India and 5 foreign offices.
3. Mazagon Dock Shipbuilders Ltd
Mazagon Dock Shipbuilders is India’s leading shipbuilding company that has its roots back to 1774. The company has set up 805 vessels (including 30 warships) and 8 submarines since 1960. It also delivered cargo ships, passenger ships, supply vessels, and fishing trawlers to India and abroad.
4. Solar Industries India Ltd
Founded in 1995, Solar Industries is a leading manufacturer of industrial explosives and initiating systems that are used in mining, defence, and the space sector. Its footprint spans over 82 countries with 27 manufacturing facilities in India and 9 manufacturing facilities abroad.
5. Bharat Dynamics Ltd
Bharat Dynamics (BDL), incorporated in 1970, was known for manufacturing guided missile systems and allied equipment for the Indian Army. It also manufactures underwater weapons, air-borne products, weapon system integrators, and offers life cycle support as well. It has 4 manufacturing facilities and has a tag of “complete solution provider” for the Indian Army.
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6. Cochin Shipyard Ltd
Cochin Shipyard is a Miniratna company that was founded in 1969 to set up a shipbuilding and ship repair yard in India. It has built India’s first greenfield shipbuilding yard in Cochin. The company has the expertise to build and repair the largest vessels in India.
7. Garden Reach Shipbuilders & Engineers Ltd
Garden Reach Shipbuilders is a shipbuilding company that fulfills the requirements of the Indian Navy. It was established in 1884 and now presents in different product profiles such as shipbuilding, ship repairs, engineering, assembly, and testing of MTU diesel engines. Over the last 62 years, the company has built over 780 platforms (including 108 warships), which is the highest number for any Indian shipyard company till FY24.
8. BEML Ltd
BEML (previously known as Bharat Earth Movers Limited) was incorporated in 1964 and manufactures vehicles and equipment for defence, aerospace, mining, construction, railway, and metro sectors. In 1965, the company’s turnover was ₹5 crores, and today, it has reached ₹4,300 crores.
9. Data Patterns (India) Ltd
Incorporated in 1998, Data Patterns is a vertically integrated defence electronics company having a diversified product portfolio of COTS Boards, ATE & Test Systems, electronic warfare, etc. It also provides different services such as hardware design, product development services, and software services.
10. Zen Technologies Ltd
Founded in 1993, Zen Technologies offers defence training systems and anti-drone technologies to armed forces. Its product portfolio spans three vehicles: training solutions, counter-drone solutions, and operational equipment. It has deployed more than 1,000 solutions and has filed over 170 patents globally.
Latest Performance of Top 10 Defence Stocks
Here is the performance of the top 10 defence stocks (selected from the Nifty India Defence Index based on market capitalization):
*(Data as on May 2, 2025)
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Overview of India’s Defence Industry
The Indian defence industry is witnessing significant growth, driven by geopolitical tensions, technological advancements, and a push for modernisation and self-reliance. In the Union Budget 2025, the government has increased the allocation to ₹6,81,000 lakh crores, up 9.53% from the previous year.
In FY24, the annual defence products reached a record level of ₹1.27 lakh crores, up 16.7% from the previous year. Additionally, defence exports touched ₹21,000 crores in the calendar year 2024, and it is expected to reach 50,000 crores by 2029.
Some of the key government initiatives, such as Make in India and the Defence Production and Export Promotion Policy (DPEPP) are pushing India’s domestic capabilities and manufacturing strength. The government has also established two Defence Industrial Corridors (DICs), which are expected to attract the investment of ₹10,000 crores in each.
The future growth of India’s defence industry will be driven by the continued government support, startups promotion, export growth, global partnership, emphasis on R&D, and geopolitical tensions with the neighbouring nations.
Advantages and Risks Associated with Investing in Defence Stocks
The Indian defence sector offers intriguing investment opportunities, but it’s crucial to understand the advantages and risks involved before making any decisions.
Advantages:
- Stable Demand: Geopolitical tensions or regional conflicts often increase government defence spending, potentially benefiting these stocks.
- Government Support: The Indian government prioritises self-reliance in defence equipment, creating opportunities for domestic companies through initiatives like “Make in India.”
- Technological Advancements: The defence sector constantly innovates, and companies at the forefront can experience significant growth.
Risks:
- Dependence on Government Budgets: Defence spending can fluctuate depending on political and economic factors, impacting company performance.
- Cyclical Performance: Defence stocks might underperform during extended periods of peace, as government spending priorities might shift.
How to Start Investing in Defence Stocks?
Investing in defence stocks can be straightforward with the proper steps. Here’s how you can get started:
- Go to the SMC Global Securities official website or download the SMC ACE App.
- Open a Free Demat Account
- Begin Investing
SMC makes it easy to navigate the financial market and begin your investment journey in defence stocks.
Conclusion
Investing in defence stocks in India can be a lucrative option for those seeking stable returns and exposure to a critical sector of the economy. With the government’s focus on promoting Indigenous defence manufacturing and reducing import dependency, the defence industry is poised for significant growth. SMC Global Securities offers a seamless and secure platform for investors to navigate the defence stocks market. You can benefit from the sector’s growth prospects by opening a demat account and investing in top defence stocks. Start your defence stocks investment journey today with SMC Global Securities.
Frequently Asked Questions – FAQs
1. What are Defence Stocks?
Defence stocks represent companies involved in designing, developing, and supplying equipment and services for the military and national security. These include weapons, aircraft, vehicles, electronics, and more.
2. Why Invest in Defence Stocks in India?
India’s defence sector is expected to grow significantly due to rising geopolitical tensions, Government initiatives like “Make in India” promoting self-reliance, increasing defence budgets, and high entry barriers and long-term contracts in the industry.
3. What are the Advantages and Risks of Defence Stocks?
The advantages of investing in defence stocks are stable demand for defence equipment, government support, and technological advancements. However, this sector is exposed to various risks such as high dependency on budgetary allocation and economic uncertainties.
Author: All Content is verified by SMC Global Securities.
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