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Defence Sector Stocks in India

Getting equipped with modern weapons has become a necessity for India's defence forces, to stave off China's border intrusions.

Over the years, it became evident that diplomatic talks with China or Pakistan cannot resolve the issue.

Until now, India relied on imports to empower defence forces. But things have started to change, and India is on course to become self-reliant in the defence field.

In the past few years, India has made extensive efforts to boost its domestic defense production and has set an ambitious target of US$5 bn of military exports by 2025.

India is also promoting private-sector collaboration in defense production. The boom in Indian defence manufacturing sector does not look very far.

The government's push for self-reliance is acting as a massive tailwind for defence sector stocks.

As military spending increases, there will be growing demand for defence equipment which may push defence sector stocks higher.

While defence sector stocks may not look as exciting and trending as tech stocks, they are strong candidates for long-term wealth creation.

As every investing comes with risks, here's what you need to keep in mind while hoping to get rich from the defense megatrend...

The defence business is lumpy, with the government acting as the key client in most cases. The receivable days are long, and orders depend on the budgetary allocations towards defense. (thankfully, India has allocated heavily towards defence).

While investing in defence stocks, look for low debt defence companies. The defence business is capital intensive so there's a change defence sector stocks have substantial debt on their books.

Other way to play this trend is by investing in defence sector stocks which are working towards defense technologies and IP (intellectual property). These would find applications not just in defense industry, but outside as well.

This will include the likes of communications, sensors, radars, imaging systems, advanced materials, drones, and so on.

It also makes sense to look for companies where the market is not limited to India but are global with scalability in the business.

Check out Equitymaster's powerful stock screener to find the top defence stocks in India.

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Defence stocks are breaking out. Find out if it's time to buy them.

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Apr 7, 2022

Defence has been a priority sector for the Indian Government for realising its objective of 'Atmanirbhar Bharat.' How will it impact India's largest defence PSU, HAL? Read on...

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Nov 22, 2021

The Indian drone market is currently a tiny fraction of the global drone market and holds immense promise in the years to come.

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Nov 25, 2020

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Mar 24, 2023

Shares of Hindustan Aeronautics (HAL) have seen a broad correction, following a stellar rally in the past 24 months. Find out why.

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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.

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Sep 14, 2022

Amid escalating geopolitical tensions, mutual funds are strategically investing in defence stocks.

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.

Full Update: India's Top 5 Defense Stocks and How They are Faring in 2022

Jun 8, 2022

Defence stocks including HAL, Bharat Electronics, among others have rallied in 2022 so far. Find out what's powering them ahead.

Is this the Best Time to Invest in Defence Stocks?

Apr 8, 2022

The defence ministry has announced to acquire military equipment worth Rs 5 lakh crore from domestic firms in next 5-7 years.

This Defence Sector IPO has Impressed Investors. Lists at 47% Premium

Dec 24, 2021

Shares of this company made a solid debut on the bourses today.

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Oct 27, 2021

As the government opens the sector for private players, it could help these companies.

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Jul 8, 2021

If you're holding defence stocks, you should read this.

How to Participate in India's Drone Revolution

Oct 20, 2020

The Chinese drone market is 14 times that of India's. Billions may flow into Indian drone companies too. Don't miss out on this wealth creating opportunity.