Helping You Build Wealth With Honest Research
Since 1996. Try Now


Invalid Username / Password
Invalid Captcha
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Best Defence Stocks to Buy in India

The defence industry is strategically important for India as it helps in strengthening its security system and accounts for a portion of the exports.

For the past few years, the government has been encouraging domestic manufacturing in this industry by imposing restrictions on imports, indigenisation, and the 'Make in India' policy.

This led defence manufacturing companies to develop military products locally at a competitive price. As a result, the defence exports jumped sixfold from Rs 15 bn to Rs 90 bn in the last five years.

Now that several governments have been ramping up their defence budget, the demand for military products is increasing.

India is in a sweet spot as it has well-established companies in this space expanding their capacities to meet the growing demand.

Hence investors can consider adding these defence stocks to their watchlist. But before you make a call, make sure you check the fundamentals of these companies.

Here's a list of defence stocks you can consider for further analysis:

Hindustan Aeronautics

The company manufactures and maintains aircraft and helicopters for the Indian Airforce, Indian Army, ISRO, Indian Navy, and Indian Coast Guard, among others.

As of February 2022, the company had a strong order book of Rs 800 bn. It expects it to cross Rs 1 tn by the end of next year, which will last for the next 10-12 years.

Hindustan Aeronautics also has an order from ISRO along with L&T to build the polar satellite launch vehicle.

The company has also signed a pact with Safran, a French firm, to explore opportunities for new helicopter engines.

It has 20 manufacturing and 10 R&D facilities in India. It's also setting up a facility in Karnataka to manufacture helicopters.

Bharat Electronics

Bharat Electronics manufactures electronic equipment for the Indian defence forces. The company has diversified into non-defence products and software.

It has a reputed customer base that includes DRDO, ISRO, Railways, and All India Radio.

The company has orders from the air force, army, navy, and non-defence category worth Rs 230 bn for the financial year 2022 providing enough revenue visibility for the next three years.

It has nine manufacturing facilities and two R&D facilities in India.

Cochin Shipyard

Cochin Shipyard is India's first greenfield shipyard that builds and maintains vessels such as tankers, defence ships, passenger ships, and bulk carriers. The company also diversified into inland, coastal, fishing, cruise, and ferry markets.

Some of its clients include the Indian Navy, Shipping Corporation of India, Indian Coast Guard, and National Petroleum Construction Company (Abu Dhabi).

It has a strong order book and has Rs 100 bn worth of orders from the Indian Navy. The company also has secured orders from European and Middle-East companies.

The company has a shipbuilding capacity of 110,000 deadweight tonnage (DWT) in India. It also has five repair facilities in India with a total repair capacity of 125,000 DWT.

Mazagon Dock Shipbuilders

Mazagon Dock Shipbuidlers builds and repairs different vessels, including ships and submarines.

It builds passenger ships, cargo ships, destroyers, warships, water tankers, submarines, fishing trawlers and corvettes for the Indian Navy and Indian Coast Guard.

It has a pipeline of orders worth Rs 800 bn to be executed in the next three to five years. It has also partnered with Zvesda, a Russian shipbuilding firm, to build commercial ships.

Currently, it has a shipbuilding capacity of 4,000 DWT. It is expanding its capacity by developing a greenfield project in Navi Mumbai.

Bharat Dynamics

It's the prime production agency for guided weapon systems for the Indian defence sector.

The company manufactures guided missiles and allied defence equipment for the Indian armed forces. It also offers product life cycle support and refurbishment for vintage missiles.

Bharat Dynamics product portfolio includes indigenously developed missiles, surface-to-air missiles, anti-tank guided missiles, and torpedoes.

Its unexecuted order book stands at Rs 114 bn as of February 2022. The company also secured an order worth Rs 303 bn from the Indian Army to be executed in the next three years.

Currently, the company has four state-of-the-art manufacturing facilities in India. It's also setting up another unit in Maharashtra to cater to the growing demand.

Also check out all the list of defence stocks in the market.

You can also checkout our playlist on Defence Stocks on Equitymaster's YouTube channel.


Investing in Indian Defence? Here are the Top 5 PSU Defence Stocks

May 15, 2024

PSU Defence stocks have outperformed broader markets by wide margins. Here's top 5 to keep an eye on.

Railways and Defence: Which Stocks Can Handle the Booming Indian Stock Market?

Feb 26, 2024

How are railway stocks and defence stocks shaping up this year? Find out...

How Indian Defence Stocks are Shaping Up for 2024

Jan 29, 2024

How is this hot sector likely to perform in 2024? Find out...

Can Mazagon Dock's Unique Opportunity in Submarine Tourism Propel the Stock to New All Time High?

Jan 11, 2024

This innovation at sea could improve Mazagon Dock Shipbuilders' fortunes.

Top 5 Defence Stocks to Watch Out in Nifty's Run-up to 40,000

Oct 13, 2023

As Nifty inches towards new highs, these defence stocks could also benefit given the massive push by the government.

Damani Exits Smallcap Defence Stock. What Investors Need to Know.

Jul 11, 2023

The ace investor's name is missing from the latest shareholding pattern of this defence firm. Find out more details about the company inside and why Damani sold his stake in Q1.

Defence Sector Stocks Are Rising. Does the Rally Have Enough Steam?

Jun 6, 2023

Indian defence sector stocks are on a roll in recent weeks. Find out whether this is a short term rally or stocks will continue their momentum.

Top 5 Defence Companies in India by Growth

Jan 3, 2023

Defence stocks are being hailed as multibagger stocks of the future. And the reasons are compelling. Keep these five high growth defence companies on your watchlist.

How to Find the Best Defence Stocks to Buy

Dec 20, 2022

What if I were to tell you that one of the most laid-back sectors is now on steroids?

Defence Stocks: The Multibagger Sector of the Future

Sep 3, 2022

Defence is one of PM Modi's top picks in his rigorous 'Make in India' push.

The Best Defence Stocks are Not Hiding in Plain Sight

Feb 29, 2024

Are you investing in these hidden defence stocks?

The Long Term Upside in India's Defence Exports Megatrend

Feb 8, 2024

Should you consider Indian defence stocks now? Find out...

Best Defence Stock: Mazagon Dock vs Cochin Shipyard

Jan 14, 2024

Which defence shipbuilding stock has a better chance of faring well against the other in 2024? Find out...

Multibagger Defence Stock Announces Stock Split and Interim Dividend

Nov 8, 2023

While stock splits do not affect the underlying business, it is undeniable that there is price movement around stock split announcements and execution of the same.

Smallcap Defence Company Declares 2:1 Bonus Issue; Stock Zooms 20%

Oct 10, 2023

Avantel shares are up 4x in a year. Read on to find out factors driving the rally and what lies ahead.

Defence Stock Zooms 10% on Debut. More Details Inside...

Jun 12, 2023

Will this newly listed company be a big beneficiary of the defence megatrend in India?

Top Defence Stocks to Watch Out as India Approves Rs 70,500-Crore Order

Mar 23, 2023

India's recent purchase of military equipment worth Rs 705 billion (bn) has given a fresh boost to the defence sector.

End Your Search for the Best Indian Defence Stocks to Buy

Dec 29, 2022

What if I were to tell you that one of the most laid-back sectors is now on steroids?

Here's Why India's Next Wealth Creators Could be Defence Stocks

Sep 14, 2022

Defence stocks are being hailed as the multibagger stocks of the future. We believe the reasons are compelling.

The Future for Defence Stocks Keeps Getting Better. Here's All You Need to Know...

Jul 20, 2022

The Indian defence sector is experiencing accelerated growth. With government supporting homegrown industries, the future of defence stocks looks promising.


Which are the top defence companies in India?

Based on marketcap, these are the top defence companies in India:

You can see the full list of defence stocks here.

And for a fundamental analysis of the above companies, check out Equitymaster’s Indian stock screener which has a separate screen for best defence stocks in India.

When should you invest in the defence sector?

The best time to invest in the defence sector is when valuations of defence companies are attractive.

Where can I find a list of defence stocks?

The details of listed defence companies can be found on the NSE and BSE website. For a curated list you can check out our list of defence stocks.

What are the metrics used to evaluate defence companies?

Two commonly used financial ratios in the valuation of defence stocks are:

Price to Earnings Ratio (P/E) - One can also use Price to Earnings ratio (P/E) which compares a firm's market capitalization to its with its earnings per share. The higher the P/E ratio, the more overvalued the stock and vice versa.

To find stocks with favourable P/E ratios, check out our list of defence stocks with their P/E ratios.

Price to Book Value Ratio (P/BV) - One can also use Price to Book Value Ratio (P/BV) which compares a firm's market capitalization to its book value. The lower the ratio, the more undervalued the stock is and vice versa.

To find stocks with favourable P/BV ratios, check out our list of defence stocks with their P/BV ratios.

What are the top gainers and top losers within the defence sector today?

Within the Defence sector, the top gainers were BHARAT DYNAMICS (up 5.0%) and KAYNES TECHNOLOGY (up 5.0%). On the other hand, RELIANCE NAVAL & ENG. (down 4.6%) and SOLAR INDUSTRIES (down 0.1%) were among the top losers.