5 Defence Stocks to Watch as India-Israel Defence Ties Strengthen

#2 Bharat Electronics

Next on the list is Bharat Electronics.

Bharat Electronics Limited (BEL) is a leading aerospace and defence electronics company. From air defence systems and radars to communication networks and electronic warfare solutions, the company offers a comprehensive defence electronics portfolio.

BEL's product portfolio spans radars, missile systems and C4I solutions, defence communication systems, electronic warfare and avionics, naval systems, electro-optics, tank electronics, seekers, and precision weapon systems, placing it at the core of India's defence modernisation drive.

Nearly 90% of the company's turnover is generated from the defence segment, underlining its strong strategic positioning. The company is also gaining traction in high-growth segments such as air defence systems and electronic warfare.

Further, in 2024, BEL further strengthened its international defence footprint through a joint venture with Israel Aerospace Industries (IAI), forming BEL IAI AeroSystems Private Limited to provide post-warranty lifecycle support for defence systems in India.

The JV aligns well with deeper India-Israel defence cooperation, positioning BEL as a key stock to watch amid the evolving bilateral defence MoU and rising focus on indigenous capability building.

Going forward, the company plans to expand into international defence and civilian markets.

For more details, see the Bharat Electronics factsheet and quarterly results.

#3 Bharat Forge

Next on the list is Bharat Forge.

Bharat Forge Limited is a global leader in highperformance, safety-critical components and solutions across a wide spectrum of industries, including automotive, aerospace, and defence.

It has end-to-end indigenous capabilities across artillery systems, protected and armoured vehicles, naval utility products, and consumables.

With revenue of around Rs 180 bn across artillery systems, armoured vehicles, sustainment spares, and naval utility products, the segment is gradually delivering on its long-term strategic vision.

A key focus area is the small arms segment, where significant investments have been made to build a globally competitive product portfolio.

As of March 2025, Bharat Forge's executable defence order book stands at around Rs 95 bn, providing strong multi-year revenue visibility.

Further strengthening its defence ecosystem, Kalyani Rafael Advanced Systems-a joint venture (JV) between Kalyani Strategic Systems and Rafael Advanced Defense Systems-inaugurated a state-of-the-art manufacturing facility in Hyderabad in 2017.

In line with the government's Make in India initiative, the JV will invest in high-end technology and advanced manufacturing techniques to design and manufacture state-of-the-art weapon systems for the Indian Armed Forces.

For more details, see the Bharat Forge factsheet and quarterly results.

#4 MTAR Technologies

Next on the list is MTAR Technologies.

MTAR is a national leader in precision-engineered products in the clean energy, aerospace, and defence sectors.

The company's defence product portfolio spans critical aerospace and aircraft components, including helicopter housings, magnesium gearboxes, and actuator assemblies supplied for platforms such as the LCA Tejas.

MTAR's customer base features leading Israeli defence and aerospace majors, including Rafael Advanced Defence Systems Ltd, one of Israel's largest defence firms, and Israel Aerospace Industries, the country's primary, state-owned aerospace and aviation manufacturer.

These longstanding relationships position MTAR as a stock to watch amid the strengthening India-Israel defence cooperation following the recent MoU.

For more details, see the MTAR Technologies factsheet and quarterly results.

#5 Cochin Shipyard

Last on the list is Cochin Shipyard.

With over five decades of maritime legacy, the company has emerged as a national leader in shipbuilding and ship repair, catering to both defence and commercial segments.

As of 31 March 2025, Cochin Shipyard has built over 31 vessels and has repaired some of the largest and most advanced ships in India, including the country's first indigenous aircraft carrier, INS Vikrant.

In 2019, Israel Aerospace Industries announced contracts worth US$ 93 m to supply Naval Medium Range Surface-to-Air Missile systems to India.

These contracts were signed with the Indian Navy and Cochin Shipyard, highlighting the company's role in advanced naval programmes. This development positions Cochin Shipyard as a stock to watch amid the recent MoU-led momentum in defence cooperation.

For more details, see the Cochin Shipyard factsheet and quarterly results.

Conclusion

In Budget 2026, the government raised defence spending to Rs 7.85 trillion (tn) for the current financial year from Rs 6.8 tn in the previous year, a nearly 15% increase.

The higher capital allocation underscores the government's sustained focus on acquiring advanced weapon systems and strengthening indigenous defence manufacturing capabilities.

Further, India and France deepened their strategic partnership during French President Emmanuel Macron's visit to India, with more than 20 agreements and MoUs across defence, technology, innovation, and energy sectors.

Expanding defence cooperation with Israel is likely to provide an additional boost to the sector.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

Happy investing.

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