By continuing, you agree to LoansJagat's Credit Report Terms of Use, Terms and Conditions, Privacy Policy, and authorize contact via Call, SMS, Email, or WhatsApp
Disclaimer: The information published on LoansJagat is intended for general informational and educational purposes only and should not be considered financial, legal, or investment advice. Interest rates, loan terms, statistics, and other data may change over time and may vary by lender or source. Please verify the latest information and consult a qualified financial advisor or the respective Bank/NBFC before making any financial decisions.
Subscribe Now
About the author
LoansJagat Team
Contributor‘Simplify Finance for Everyone.’ This is the common goal of our team, as we try to explain any topic with relatable examples. From personal to business finance, managing EMIs to becoming debt-free, we do extensive research on each and every parameter, so you don’t have to. Scroll up and have a look at what 15+ years of experience in the BFSI sector looks like.
Related Blog Post
Simplify All Your Loans Into One Affordable EMI
Customers Served
Debt Consolidated
1200+ Reviews
Locations in India
Club all Loans & Credit Card Bills into Single EMI
Quick Apply Loan
Consolidate your debts into one easy EMI.
Takes less than 2 minutes. No paperwork.
10 Lakhs+
Trusted Customers
2000 Cr+
Loans Disbursed
4.7/5
Google Reviews
20+
Banks & NBFCs Offers
Other services mentioned in this article
Imagine you had purchased 100 units of Mazagon Dock Shipbuilders in April 2024 for ₹700 each. Overall investment? ₹70,000. Skip forward by a year, and it saw the share price grow to ₹1,588. Boom! Your investment now holds value worth ₹1,58,800. That's a gain of ₹88,800 or +126.87% over one year.
First-Time Investment: ₹70,000
Present Value: ₹1,58,800
Profit: ₹88,800
Return: 126.87%
Isn’t it surprising for an industry usually seen as slow? Defence stocks are rising fast because the government is buying more, exports are growing, and companies are making cool new things like drones and missiles. Want to invest in something that also makes you feel proud of the country?
Note: Defence shares increased by as much as 6% following the Defence Acquisition Council's approval of proposals worth more than ₹54,000 crore. The acquisitions will enhance the Indian Army, Navy, and Air Force. The Defence Ministry is also reforming to accelerate the procurement process to minimise delays and expenses.
Defence stocks are shares in defence manufacturers that produce military gear such as weapons, boats, and planes. They are generally perceived as safe because governments tend to continue defence spending even during hard times. They have the potential for growth based on worldwide demand and advancing technology, but others avoid them because of war and conflict, and ethical concerns.
For example, Ravi is an investor who normally puts money into tech and banking stocks. In 2022, he started looking into India’s defence sector after hearing about government support and export growth. He notices that:
So, Ravi decided to invest ₹1 lakh in a mix of defence stocks in mid-2023. By early 2025, his investment is worth ₹1.4 lakh, a 40% return, beating his banking stock returns during the same time.
Why did this happen? Because
Read More - How to Analyse Stocks
Top Reasons to Invest in Defence Stocks
Reason | Explanation | Real Impact/Example |
Stable Income & Demand | Defence companies get long-term government contracts, ensuring steady income. | Bharat Dynamics gets regular orders for missiles and rockets. |
Here’s a list of some of the best defence stocks in India, based on financial stability, growth potential, and market performance:
NOTE: The following data has been procured from the official website of Google Finance.
Stock Name | Market Cap (₹ Cr) | P/E Ratio | Dividend Yield (%) | 1-Year Return (%) |
Hindustan Aeronautics Ltd | 2.75T INR |
Important Key Points
Key Term | Meaning | How It's Calculated | Example |
Market Cap | Shows the total value of a company in the stock market. |
Here’s the information about the key factors influencing the price and value of Defence Stocks:
Key Driver | Sub-Factor | Impact |
Government Policies and Regulations | Defence Procurement | Policies like "Make in India" and procurement strategy changes drive demand for locally manufactured defence equipment. |
Adoption of drones and AI presents both opportunities and challenges based on a company’s tech readiness.
Economic Factors
Global Economic Trends
Economic downturns impact funding and defence budgets, especially for globally exposed companies.
Raw Material Volatility
Fluctuating raw material prices affect production costs and profit margins.
Government Support
Initiatives like ‘Atmanirbhar Bharat’ and ‘Make in India’ push for local manufacturing. |
Over 2,900 defence items indigenised, 60,000+ parts by the Air Force. |
Rising Exports | India's defence exports rose to ₹21,083 crore in FY24 (32.5% growth YoY). | Goal: ₹50,000 crore by FY29; buyers include countries in Africa & Asia. |
Cutting-Edge Technology | Defence firms work on aerospace, drones, cyber defence, and more. | HAL, BEL are investing in AI-based systems and high-tech aircraft. |
Strong Investor Interest | Funds and retail investors are showing confidence. | ₹1,676 crore raised by Motilal Oswal Defence Fund in NFO. |
Diversification & Long-Term Value | Defence stocks act differently from IT/banking; good for portfolio balance. | Ravi’s 40% gain vs lower gains in traditional sectors. |
31.54 |
0.93% |
+13% |
Bharat Dynamics | 484.69B INR | 85.62 | 0.33% | +49.74% |
Bharat Electronics | 2.08T INR | 41.74 | 0.81% | +21.69% |
Cochin Shipyard | 368.40B INR | 46.18 | 0.70% | +32.65% |
Mazagon Dock Shipbuilders | 980.87B INR | 35.70% | 0.60% | +126.87% |
Paras Defence And Space | 39.21B INR | 71.37 | — | +42.79% |
Data Patterns (India) Ltd | 94.40B INR | 52.73 | 0.39% | -40.95% |
Astra Microwave Products Ltd. | 68.65B INR | 50.66 | 0.28% | +9.81% |
Ideaforge Technology Ltd | 14.56B INR | — | — | -50.98% |
Solar Industries India | 1.02T INR | 91.14 | 0.08% | +31.40% |
If share price = ₹100, shares = 1 crore, Market Cap = ₹100 × 1 crore = ₹100 crore |
P/E Ratio | Tells how much investors are willing to pay for ₹1 of the company’s earnings. | Share Price ÷ Earnings Per Share (EPS) | If share price = ₹200, EPS = ₹20, then P/E = 200 ÷ 20 = 10 |
Dividend Yield | Shows how much return you get from dividends compared to the share price. | (Annual Dividend ÷ Share Price) × 100 | If dividend = ₹2 and share price = ₹50, dividend yield = (2 ÷ 50) × 100 = 4% |
1-Year Return | Shows how much your investment has grown or dropped in one year. | (Gain ÷ Original Investment) × 100 | Priya invested ₹40,000, now it's ₹50,000. Gain = ₹10,000 → (10,000 ÷ 40,000) × 100 = 25% |
Defence Budget Allocation
National budget allocations influence the scale and frequency of contracts awarded to defence companies. |
FDI and Licensing Norms | FDI and licensing regulations determine foreign participation and affect domestic players. |
Policy and Leadership Changes | Administrative or policy shifts can alter procurement plans, causing uncertainty and market volatility. |
Geopolitical Environment | Regional Tensions and Conflicts | Conflicts and border tensions usually result in increased defence spending and demand for military assets. |
International Trade and Sanctions | Sanctions and trade restrictions disrupt supply chains and limit export opportunities. |
Global Security Threats | Rising threats such as terrorism and cyberattacks lead to expanded defence investments. |
Technology Developments | Research & Development (R&D) | Firms investing in R&D are better positioned to innovate and win contracts. |
Cybersecurity Solutions | The rise of cyber warfare offers growth for cybersecurity-focused defence companies. |
Emerging Technologies (Drones & AI) |
*T&C Apply
Currency Exchange Rates
Export-driven defence firms are vulnerable to exchange rate movements, impacting revenues. |
For example, Rahul wanted to invest ₹1,00,000 in a defence stock, and this time, he set his sights on Astra Microwave Products Ltd. Here’s how he analysed the company using a step-by-step approach:
1. Start with Financial Health
Rahul first checked Astra’s financial health. The company reported a revenue of ₹68.65 billion (₹6,865 Cr) and profitability of ₹50.66 Cr. This showed a strong and steady financial performance, and the company's profit margin was positive at 9.81%, indicating efficient operations.
2. Debt Levels and Cash Flow
Astra's debt ratio was 0.28%, which meant it wasn’t overburdened with debt. This gave the company the flexibility to invest in future growth without the risk of financial strain.
3. Government Contracts and Policy Support
Astra Microwave, a major player in the defence sector, benefits from government contracts and the Atmanirbhar Bharat initiative. With increasing government spending on defence, Rahul knew Astra would continue to get significant orders.
4. R&D Investment and Technological Edge
Astra spends a significant amount on research and development (R&D) to maintain its edge in areas like radar, communication systems, and other microwave technologies. In a field driven by constant technological upgrades, this investment is crucial.
5. Export Growth and Global Expansion
Astra's exports have been growing steadily, contributing to a diversified revenue stream. This international reach opens up new markets, reducing the company’s reliance on any one region or customer base.
6. Diversification and Market Reach
Astra Microwave is expanding into different segments within the defence and aerospace sectors. This diversification spreads the risk and increases growth opportunities.
The Result?
Rahul invested ₹1,00,000 in Astra Microwave Products Ltd.. A year later, his investment grew by 9.81%, reaching ₹1,09,810. This growth reflected the company’s strong financials, government support, technological innovation, and expanding exports.
Rahul’s Analysis Table
Factor | Astra Microwave Products Ltd. Info | Why It Matters |
Revenue & Profit | ₹68.65B revenue / ₹50.66 Cr profit | Strong financial performance shows growth potential |
Debt Level | Low (0.28% debt ratio) | Minimal financial risk allows for growth and investment |
Govt Contract | Government-backed defence contracts | Stable income from government contracts |
R&D Spending | Significant R&D investment | Key to staying competitive with new technologies |
Export Growth | Positive export growth | Expanding market reach and new revenue streams |
New Markets/Partnerships | Expanding into new sectors globally | Reduces risk and boosts growth opportunities |
For example, Ravi put ₹1,00,000 into a defence stock at ₹500 per share, expecting huge returns. But a change in government policy held up important orders, and the stock fell to ₹380, reducing his investment to ₹76,000. Throw in project delays and cost increases, and profits fell too. Defence stocks can pay well, but they have real-world risks too.
Also Read – Defence Sector Stocks
Investing in defence stocks can be rewarding, but not without certain special risks. Here are some challenges and risks in defence stocks:
1. Reliance on Government Contracts
2. Valuation and Market Volatility
3. ESG Risks (Environmental, Social, Governance)
4. Other Key Risks
For example, Neha is a 30-year-old working professional. In 2022, she decided to invest ₹1,00,000 in a defence stock, BEL (Bharat Electronics Ltd.), after hearing about the government’s support for Indian defence companies.
At that time, BEL shares were priced at around ₹100 each. Over the next 2 years, the company got more government contracts, exports increased, and it started working on new technologies. By 2024, the share price went up to ₹150, a 50% gain.
Her ₹1,00,000 became ₹1,50,000.
Now in 2025, Neha is wondering whether she should invest more in defence stocks? Or has the big growth already happened?
To answer this, she looks at what’s happening in the defence sector right now.
The below information is procured from an article from The Hindu and Financial Express
Point | Explanation |
1. Government Support | The government is helping Indian defence companies through Make in India and Atmanirbhar Bharat. |
2. Higher Defence Spending | More money is being spent to modernise the army, navy, and air force with new aircraft, ships, etc. |
3. Growing Exports | India exported ₹23,000 crore worth of defence goods in 2023–24. Target is ₹50,000 crore by 2029. |
4. Strong Order Books | Big companies like HAL, BEL, and MDL have large pending orders worth thousands of crores. |
5. Private Sector Entry | Private firms like Solar Industries and Astra Microwave are also joining the defence sector. |
6. Focus on Technology | The future of defence includes AI, machine learning, and digital tech, as highlighted by the minister. |
But Wait, What’s Happening in 2025?
Now, in 2025, some defence stock prices are falling a bit. Investors are asking:
But remember, the company fundamentals are still strong, good profits, growing exports, big orders, and tech focus. This dip could just be a chance to invest at a lower price, like a discount.
Companies to Watch
Company | What They Do | Why It’s Important |
HAL | Builds aircraft and helicopters | Big government orders, key to the Air Force |
BEL | Makes radars, communication systems | Steady profits, wide product range |
MDL | Builds Navy warships | India is focusing on naval strength |
BDL | Makes missiles and rockets | More defence exports, local production boost |
Cochin Shipyard | Builds and repairs ships | Crucial for Navy expansion |
Solar Industries | Makes explosives and defence materials | High export potential, private sector growth |
If you’re looking for long-term growth, the defence sector still has strong support, big goals, and global opportunities.
Defence stocks are the right investment for some kinds of investors. They tend to give stable returns because of constant government orders and ongoing demand. Yet at the same time, it is also important to remember that international tensions and market fluctuations can affect them.
Here's who might be the right person to invest in defence stocks:
1. Long-Term Investors
2. People Looking to Diversify Their Portfolio
3. Moderate Risk Takers
4. Investors' Acceptance of the Morality of Defence
Open a DEMAT Account: Begin by opening a DEMAT account and associating it with your current bank account to simplify making transactions.
Sign In: Access your DEMAT account through a mobile app or a web interface.
Select a Stock: Select the stock in which you wish to invest.
Verify Funds: Confirm that you have sufficient funds in your bank account to purchase the shares you desire.
Buy the Stock: Take out your money and buy the stock at its quoted price, and specify how much you would like to buy.
Completion of Transaction: When a seller finds your offer acceptable, your transaction will be completed. Your bank account will be debited, and the shares will be credited to your DEMAT account.
Indian defence stocks present a promising investment with solid government backing, increasing exports, and advances in technology. As observed in the case of firms such as HAL, Mazagon Dock, and Bharat Dynamics, the industry is exhibiting rapid growth. Investment in defence stocks can provide stable returns, particularly for long-term investors or diversification seekers. Still, keep in mind the risks, like changes in government policies or delays in defence projects. If you’re ready for a balanced investment, defence stocks could be your way to support India’s future while growing your wealth.
Q1: What is the future of defence stocks in India?
While India's defence industry has long-term growth due to constant government expenditure, the stock market has already discounted this potential, so that future profit could be slow or more uneven.
Q2: Is it wise to invest in defence stocks?
Defence stocks are stable, long-term government contracts that can provide predictable income. Stability shields companies from economic recessions and market fluctuations, and they are thus a potentially reliable investment choice in uncertain times.
Q3: How to analyse defence stocks?
To assess defence stocks, compare key financial metrics such as revenue growth, profitability, and debt levels. They indicate a company's financial strength and potential for future yields.
