India's Defence Exporting Stocks to Watch Amid Rising Global Tensions

India's defence stocks are increasingly anchored to hard data rather than narratives, supported by a sharp rise in budgetary allocation and exports.

The defence budget has expanded from Rs 2.53 trillion (tn) in FY14 to Rs 6.8 tn in FY26. With higher budget allocation and 'Make in India' initiatives, exports have also surged. Defence exports reached a record Rs 236.2 billion (bn) in FY25, up from only around Rs 6.9 bn in FY14.

India supplied defence equipment to nearly 80 countries in FY25, spanning ammunition, subsystems, and complete platforms. Private sector exports contributed Rs 152.3 bn, while Defence Public Sector Undertakings (DPSUs) accounted for Rs 83.9 bn.

Operation Sindoor also demonstrated to the world the effectiveness of India's Make in India military equipment, leading to increased orders. There is growing acceptance of Indian defence products in the global market and the Indian defense industry's ability to become part of global supply chains.

Here are 5 Indian defence exporting stocks to watch...

#1 Data Patterns

First on the list is Data Patterns.

Data Patterns specialises in high-end electronic systems.

The company is expanding its presence in international markets. For exports, it typically focuses on larger systems and often redesigns its products to meet specific export requirements.

As of September 2025, the export order book stood at Rs 782 million (m), about 12% of its total order book. In the second quarter of FY26 (Q2 FY26), exports accounted for 7% of total revenue.

Data Patterns Revenue

The company expects increased traction in international markets, particularly in the UK, South America, and Europe. It's exploring co-development opportunities for radar systems with global companies.

Looking ahead, as of September 2025, order book stood at Rs 6.7 bn. The order book provides visibility of less than a year, based on FY25 revenue of Rs 7.1 bn.

That said, the company is targeting an additional Rs 10 bn in orders over the next two quarters. About Rs 5.5 bn in negotiated orders was expected to be formalised into contracts by January.

It's also participating in the Advanced Medium Combat Aircraft program as part of a consortium with Bharat Forge and BEML. Overall, the company has a strong pipeline of potential orders worth Rs 20-30 bn over the next 2 years.

The management has provided financial targets for the short and medium-term. The aim is to maintain 20-25% revenue growth over the next 2-3 years. To achieve this, the company is evolving from a subsystem provider to a developer of complete electronic systems.

The company has invested Rs 1.2 bn in research and development for airborne fire radar and electronic warfare systems. Data Patterns is targeting a total addressable market of Rs 150-200 bn.

From a financial perspective, consolidated revenue grew by 3.4 times to Rs 3.1 bn in Q2 FY26. EBITDA surged 2 times to Rs 685 m, but margins contracted to 22.3%. The net profit increased 63% year-on-year (YoY) to Rs 490 m. The delivery of a large contract worth Rs 1.8 bn boosted revenue.

Radars and avionics accounted for 74.1% and 12.2% of the revenue, respectively. The DRDO remained the company's largest customer, representing 64% of revenue.

Check out Data Patterns' company factsheet and quarterly results to know more.

#2 Astra Microwave

Second on the list is Astra Microwave.

Astra Microwave specialises in high-value-add RF and microwave super-components, subsystems, and complete systems for the defence, space, meteorology, and civil communications sectors.

The company is transitioning from being a subsystem supplier to a lead system integrator, providing integrated solutions.

Exports are a critical pillar of its long-term growth strategy. It currently exports radar, telemetry, and hydrological components to advanced markets, including Israel, the US, and Singapore.

As of September 2025, exports constitute 7% of the company's order book of Rs 19.2 bn. In the revenue mix, exports (including deemed exports) accounted for 14.2% of total revenue in the September quarter.

Astra Microwave Revenue and Order Book

The company has identified an export opportunity of Rs 15-20 bn across all sectors through to FY28.

The management has outlined a strategy to find partners in Europe to act as distributors and technology collaborators, focusing on licensing and sourcing technologies. The plan is to offer complete, tested solutions that fit the specific needs of clients.

Through collaborations such as Astra Rafael Comsys, the company is positioning itself to deliver high-end technology systems with strong growth prospects worldwide. This JV is expected to book US$ 100-120 m in orders by the end of FY26.

The management has formulated a multi-year growth trajectory to double revenue over the next 3-4 years. The growth is expected to be rear-ended, with a significant pickup from FY27 onwards.

By FY30, plan is to reach a revenue of Rs 22.5-25 bn, as major programs like QRSAM, Uttam radar, Su-30 EW suite, and the Virupaksha radar, will all be in production then.

Astra Microwave is also expanding its space business, with plans to launch its own satellite, Astra SAT-1, within the next 24 months. It aims to capitalise on the global surge in demand for LEO satellites.

From a financial perspective, revenue declined 6.9% YoY to Rs 2.1 bn in Q2 FY26. EBITDA declined 5.5% to Rs 460 m, while margin improved to 21.7%. The net profit fell 15.3% YoY to Rs 210 m.

Its standalone order book of Rs 19.2 bn provides revenue visibility of around two years. The standalone order book comprises defence/public (70%), space (12%), meteorological (11%), and exports (7%).

Check out Astra's company factsheet and quarterly results to know more.

#3 Zen Technologies

Third on the list is Zen Technologies.

Zen Technologies is an Indian defence technology company specialising in advanced training simulators and anti-drone systems.

As of 30 September 2025, Zen's consolidated order book stood at Rs 6.8 bn, with exports accounting for around 18%. In FY25, exports accounted for more than 24% of revenue.

Exports revenue so far in FY26 has been nil but expected to accelerate in the second half of FY26.

Zen Technologies Order Book

The company is pursuing a global expansion to diversify its revenue. The management views the Indian government's push to sell defence technology to friendly allied nations as a major opportunity to de-risk the company's business.

They have identified high-potential regions for exports. The focus is on exports to Africa, the Middle East, and the CIS countries.

The company's anti-drone solutions products' are in high demand in international markets. It's because its anti-drone systems are more competent and cost-effective than global alternatives.

Another key selling point for Zen's exports is complete ownership of intellectual property for software and hardware. This shields foreign clients from kill switches or malware included by third-party vendors.

The company aims to become a global #1 or #2 player in the simulation and anti-drone segments within the next 3-5 years.

Through the acquisition of Applied Research International, Zen Technologies is leveraging its presence in Southeast Asia, including an office in Singapore, to enter those markets.

The management aims to achieve revenue of Rs 60 bn for FY27 and FY28. The company is targeting a 50:50 revenue mix between its two verticals: training simulation and anti-drone systems.

Its 6.8 bn order book provides less than a year of revenue visibility. From a financial perspective, revenue declined 28% YoY to Rs 1.7 bn in Q2 FY26. Procedural delays in regular RFPs for training simulators and equipment, amid emergency procurement after Operation Sindoor, impacted revenue growth.

EBITDA declined 18% to Rs 660 m, with margins at 38%. However, net profit stayed flat at 620 m.

Check out Zen Technologies' company factsheet and quarterly results to know more.

#4 Bharat Dynamics

Fourth on the list is Bharat Dynamics (BDL).

Bharat Dynamics is a Government of India company operating under the Ministry of Defence. It serves as a key manufacturing base for guided missile systems and allied equipment for the Indian Armed Forces.

BDL is primarily focused on the design, development, and production of sophisticated defense hardware. Its product portfolio is diverse, spanning several critical categories including missile systems, underwater weapons, avionics, and aeroengines.

Historically, exports accounted for less than 10% of BDL's revenue. It's now aggressively targeting an export share of 25% by FY29-30 by strengthening ties with friendly nations.

BDL has an order book of about Rs 235 bn (as of late 2025), with export accounting for Rs 11.7 bn. The company has seen a surge in export orders. The government has approved many BDL products for exports.

The export portfolio is diverse, including surface-to-air missiles like the Akash, which is seeing rising interest in the export market, as well as air-to-air Missiles and anti-tank guided missiles. The company also offers underwater weapons and avionics systems for export.

BDL is moving beyond simple hardware sales to provide comprehensive lifecycle management and customised solutions for its international clients. The company has outlined a roadmap for scaling its operations through the end of the decade.

The management has projected an order pipeline of roughly Rs 500 bn over the next five years. Within the next 2-3 years, the company is targeting Rs 200 bn in new orders. Major contributors to this pipeline are QRSAM, Astra Mk1, Nag ATGM, and the Varunastra torpedoes.

From a financial perspective, revenue increased 111% YoY to Rs 11.5 bn in Q2 FY26. Net profit surged 75.6% to Rs 2.2 bn, with margins at 16%.

BDL aims to reach an annual turnover of Rs 100 bn by FY30-31, up from Rs 33.5 bn in FY25.

Check out BDL's company factsheet and quarterly results to know more.

#5 Bharat Electronics

Fifth on the list is Bharat Electronics (BEL).

BEL is a Government of India company operating under the Ministry of Defence, specialising in advanced defense electronics.

As of October 2025, BEL's order book stood at Rs 7.56 bn, providing a revenue visibility of over 3 years.

Exports account for 3-4% of the revenue. The aim is to increase this to 5% over the next 2-3 years and to 10% in the long term.

To this end, BEL treats every country of strategic interest as an important lead, prioritising them based on the maturity and suitability of products.

The order pipeline is strong. The company has committed to an order inflow of Rs 270 bn for FY26, excluding the high-budget QRSAM project. If this order is finalised by March 2026, total order inflows could reach about Rs 570 bn.

Major pending orders include LRSAM (Rs 50 bn), electronic fuses (Rs 45 bn), BMP-2 upgrades (Rs 30 bn), and the Akash Army systems (Rs 27 bn).

BEL is a development partner for DRDO for the radar and control subsystems (Project Kusha: Sudarshan Chakra). It's currently in the prototype stage.

In a strategic move to move up the value chain, BEL has formed a consortium with L&T to bid for the Advanced Medium Combat Aircraft program.

BEL has committed Rs 14 bn to establish a Defense System Integration Complex in Andhra Pradesh. This facility will be the primary site for QRSAM integration and testing, as well as for other strategic business units, such as unmanned systems and military radars.

From a financial perspective, revenue increased 25.8% YoY to Rs 57.9 bn in Q2 FY26, driven by order book execution. Net profit surged 17.7% YoY to Rs 12.9 bn, with an operating margin of 29%.

Check out BEL's 5-year factsheet and quarterly results to know more.

Conclucion

Rising global tensions, sustained budgetary support, and a clear export push are structurally reshaping India's defence ecosystem.

With exports scaling beyond niche programs and order books increasingly diversified across geographies, defence companies are moving from domestic dependence to a global presence.

However, instead of relying on hype, investors need to carefully analyse the company's fundamentals, including financial performance, corporate governance practices, and growth strategies.

Happy investing.

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