4 Defence Stocks to watch as Defence Council Clears Rs 79,000 crore Procurement

Defence stocks have once again emerged as the red-hot topic on Dalal Street.

Defence stocks rallied in early trade on Friday, 24 October 2025, after the Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh, approved capital acquisition proposals worth Rs 790 billion (bn) for the armed forces.

This led to a rally of more than 1% on the Defence Index.

So, Why Are Defence Stocks Rising?

The rally comes after the government cleared several key procurement projects for the army, including:

• Nag Missile System (Tracked) Mk-II - NAMIS
• Ground-Based Mobile ELINT System - GBMES
• High Mobility Vehicles (HMVs) equipped with material handling cranes for the Indian Army.

For the Indian Navy, approvals have been granted for:

• Landing Platform Docks (LPDs)
• 30mm Naval Surface Guns (NSG)
• Advanced Light Weight Torpedoes (ALWT)
• Electro-Optical Infra-Red Search & Track System
• Smart Ammunition for 76mm Super Rapid Gun Mount

For the Indian Air Force, Acceptance of Necessity (AoN) has been accorded for:

• Collaborative Long Range Target Saturation/Destruction System (CLRTS/DS)
• Additional autonomous mission-enhancing proposals

With this wave of modernisation underway, here are top 4 defence stocks to watch closely.

#1 Bharat Electronics (Defence Electronics)

First on the list is Bharat Electronics (BEL).

Bharat Electronics Ltd (BEL) is a Navratna Public Sector Undertaking (PSU), which operates as a diversified defence electronics manufacturer.

BEL has established a strong presence across four key segments of electronic warfare systems.

• Radar ESM: Spice ESM for medium-class ships, advanced protection suites for large aircraft, and integrated EW systems for fighter jets, along with customised solutions for helicopters and smaller aircraft.
• Integrated EW Systems: Communication IEW Systems, EW suites for large warships, and fully integrated electronic warfare systems delivering complete battlefield dominance.
• Jammers: Static cell phone jammers (4G-50W), mini portable jammers, portable 5W jammers, and compact jammers to neutralise enemy networks with versatile deployment options.
• ELINT/COMINT/SIGINT: A wide portfolio including mobile ground-based ELINT Systems, COMINT & communication jamming systems, wideband signal processing & analysis systems, satellite interception systems, microwave monitoring systems, and avionics like HUDs for fighter jets (e.g., LCA).

With BEL's expertise in ground-based ELINT Systems and the DAC approving Rs 790 bn in defence acquisitions, the company emerges as a stock to watch.

Its strong foothold across critical defence electronics positions it perfectly to benefit from the government's modernisation drive.

Going forward, the company plans to expand its product offering in this space.

For more details, see the BEL company fact sheet and quarterly results.

#2 Bharat Dynamics (Guided Missile Systems)

Next on the list is Bharat Dynamics (BDL).

It was established to serve as the manufacturing base for guided missile systems and allied equipment for the Indian armed forces.

Since its inception, BDL has collaborated with DRDO and foreign Original Equipment Manufacturers (OEMs) to manufacture and supply a wide range of missiles and related systems to the Indian armed forces.

BDL's manufacturing is a mix of both indigenous and licensed production and covers various applications, including air-to-air, anti-tank, and surface-to-air system.

It is the primary manufacturer for several indigenous missile systems developed by the DRDO, including Astra, Akash, Nag Missile, Rudram-1, and more.

The Nag Missile, a third-generation, "fire-and-forget" anti-tank guided missile, has all-weather, day-and-night capabilities.

According to CNBC TV18, one of the largest allocations from the Rs 790 bn DAC-approved defence procurement is expected to go to BDL, which manufactures both Light Weight Torpedoes and Nag Missile systems.

With BDL involved in the production of the Nag Missile, the company emerges as a prime stock to watch, as it may receive orders to strengthen India's anti-tank and battlefield capabilities.

Going forward, it is focusing on building in-house capabilities in systems like missile seekers, homing devices, avionics, and cruise missile engines.

For more details, see the Bharat Dynamics company fact sheet and quarterly results.

#3 Bharat Earth Movers (High-Mobility Vehicles)

Next on the list is Bharat Earth Movers (BEML).

The company is a public sector undertaking under the Indian Ministry of Defence.

Its defence contributions include ground support vehicles for missile programs, high-mobility vehicles, bridging systems like the Sarvatra and pontoon systems, recovery vehicles, and ground support equipment for aerospace.

BEML is a key supplier of High Mobility Vehicles (HMVs) to the Indian defence forces, manufacturing various models such as 6x6, 8x8, and 12x12 vehicles for a range of roles, including troop transport and mounting specialised equipment.

These vehicles are designed for rugged, all-terrain use in difficult conditions and are crucial for the Indian Army's logistics and strategic capabilities.

With the Defence Acquisition Council approving Rs 790 billion worth of capital acquisitions, including procurement of HMVs equipped with material-handling cranes, BEML stands as one stock to watch.

Going forward, BEML has set an ambitious target to achieve 25% growth for FY26. The company is taking steps to achieve this target.

For more details, see the BEML company fact sheet and quarterly results.

#4 Garden Research Shipbuilders (Shipyard)

Next on the list is Garden Research Shipbuilders.

Garden Reach Shipbuilders & Engineers Ltd (GRSE) is one of India's oldest and most respected defence shipyards.

The PSU operates across a handful of focused business segments, with shipbuilding being its dominant revenue driver. This includes the design and construction of a wide range of naval and coast guard vessels such as stealth frigates, patrol boats, survey ships, and landing crafts.

With the defence ministry clearing a Rs 790 bn defence plan, GRSE stands to benefit as the procurement includes the 30mm Naval Surface Gun (NSG-30).

GRSE is actively involved in the indigenous manufacturing of the 30mm Naval Surface Gun (NSG-30). To support this mission, the company has established a dedicated business vertical, formed a joint venture with M/s BHSEL, and set up an assembly facility at its Taratala unit.

Going forward, Garden Reach Shipbuilders is now working on drone-based naval solutions, AI-powered surveillance tools, and high-tech refit services.

For more details, see the Garden Reach Shipbuilders company fact sheet and quarterly results.

Should You Invest in Defence Stocks?

India's defence manufacturing sector is clearly entering a phase of sustained momentum.

Record exports of Rs 210 bn in FY24, along with a cumulative Rs 883 bn since 2014, a nearly 21-fold surge, highlight the sector's rapid scale-up.

With 68% of procurement sourced domestically in FY24, a Rs 6.8 trillion (tn) defence budget for FY26, and a broad industrial base spanning 16 defence PSUs, 400+ licensed firms, and nearly 16,000 MSMEs, the ecosystem is deepening fast.

Looking ahead, India is targeting Rs 3 tn in annual production, Rs 500 bn in exports by 2028-29, and 75% domestic sourcing by decade-end, setting the stage to emerge as a credible, globally integrated aerospace and defence hub.

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.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...