Best Defence Stocks in India

11 January 2023
10 min read

The Defence Industry is the commercial sector engaged in engineering, production, and maintenance activities for military facilities, equipment, and materials, including military veterans. India's defence industry is a sector that is crucial from a strategic perspective, not only for the nation but even for its protection.

Over the past five years, India has been the top importer of Defence Technology. However, over the past few years, India has concentrated on lowering its reliance on foreign defence imports with the aid of programs like "Make in India" and "Atmanirbhar Bharat."

India wants to strengthen its defence manufacturing industry through these initiatives and develop its independence so it can counter threats from its competitors. India was forced to make this choice due to growing national security concerns.

This blog gives a thorough overview of the Indian Defence industry, advice on what to think about when buying Defence Stocks, and lists of the best Defence Stocks to buy in India. So, to learn more about the subject, keep reading the blog.

The Indian Defence Industry: A Synopsis

India's defence reserves have become more prominent after Russia attacked Ukraine. The stock markets have remained in a bear market since the war's end, but few Defence Stocks have defied the trend and kept rising. For Indian real-time investors, this may prove to be a lucrative opportunity.

Defence Stocks have outperformed the market even during the current market downturn because numerous other nations have increased their defence spending. Additionally, India was one of the top five defence spenders in the world as of 2020.

The Stockholm International Peace Research Institute (SIPRI) reports that since 2019, global military spending has increased by 2.6% annually. This reflects the global priority placed on defence, making Defence Stocks essential components of your portfolio in 2023.

Additionally, a number of the best businesses are listed on the Indian stock market and are highly regarded for their successful performance in the defence industry. These are the top Defence Sector Stocks.

Best Defence Sector Stocks India

Let us review the top Defence Stocks in India now that we have a better understanding of this industry.


Top 10 Defence Companies in India


Hindustan Aeronautics Ltd.


Bharat Electronics Ltd.


Bharat Dynamics Ltd.


Mazagon Dock Shipbuilders


Cochin Shipyard Ltd.


Bharat Earth Movers Limited (BEML)


Solar Industries Ltd.


MTAR Technologies


Paras Defence and Space Technologies


Bharat Forge Ltd.

Factors to Consider Before Investing in Defence Sector in India

  • Defence Sector is an Evergreen Sector

Recognizing that the defence industry will always exist is the best way to view it. Although the development of nuclear weapons and modern artillery serves as a strong deterrent for nations to settle disputes through military force, this does not mean that war will always be imminent.

On the contrary, every government must protect and uphold its sovereignty. This entails using military force to protect against domestic and foreign threats, cyberterrorism, and numerous other attacks. As a result, the defence sector produces new artillery to counter air, land, and sea threats.

  • A Step Towards Environmental Friendly Defence Stocks

More and more defence industries are adopting environmentally friendly practices, reducing their reliance on steel, and choosing cutting-edge nuclear technology. This offers a chance to trade in ecologically friendly defence stocks.

  • Cynical & Volatile

Defence Stocks are cyclical stocks, so it is important to remember this. Because they experience significant growth during economic uncertainty and swift declines during times of peace, they are frequently much more volatile than non-cyclical stocks.

  • The Defense Industry Goes Electric

Metal bending has been the defence industry's primary area of expertise for most of its history. Only a handful of Earth's businesses could construct enormous battleships, bombers, and tanks. However, in the defence industry, as in the rest of the world, value is increasingly going to companies that provide the brains that go inside the steel rather than the ones that forge it.

Cybersecurity and defence electronics are expanding segments of almost every company's portfolio. It is where the majority of current internal investment is going.

Top Listed Defence Sector Shares in India: An Overview

1) Hindustan Aeronautics Ltd.

Hindustan Aeronautics Limited (HAL) is a Bangalore-based Indian state-owned aerospace and defence company. HAL, founded on December 23, 1940, is one of the world's oldest and largest aerospace and defence manufacturers. HAL began aircraft production for the Indian Air Force in 1942, with licensed production of the Harlow PC-5, Curtiss P-36 Hawk, and Vultee A-31 Vengeance.

HAL currently operates 11 dedicated R&D centers and 21 manufacturing divisions across four production units in India. HAL is managed by a Board of Directors appointed by the President of India through the Government of India's Ministry of Defence.

HAL designs and manufactures fighter jets, helicopters, jet engines and marine gas turbine engines, avionics, software development, spares supply, overhauling, and upgrading Indian military aircraft.

2) Bharat Electronics Ltd.

Bharat Electronics Limited (BEL) is a government-owned Indian aerospace and defence electronics firm. Its primary business is producing advanced electronic products for ground and aerospace applications. BEL is one of nine PSUs under India's Ministry of Defence. The Government of India has designated it as a Navratna.

BEL is a multi-product, multi-technology, multi-unit conglomerate with over 350 products spanning Radars, Missile Systems, Military Communications, Naval Systems, Electronic Warfare & Avionics, C4I Systems, Electro Optics, Tank Electronics & Gun/Weapon System Upgrades, Solar Photovoltaic Systems, Electronic Components, and civilian products. Small components costing a few rupees to large systems costing crores of rupees are among the products available.

With its years of experience, the company also offers turnkey system solutions. While defence contributes nearly 80 to 85% of its revenue, BEL has reached out to the general public through civilian products such as solar traffic lights and electronic voting machines (EVMs).

3) Bharat Dynamics Ltd.

Bharat Dynamics Limited (BDL) is an Indian ammunition and missile system manufacturer. In 1970, it was established in Hyderabad, Telangana, India. BDL was founded with a pool of engineers drawn from Indian Ordnance Factories, DRDO, and the aerospace industries as a manufacturing base for guided weapon systems. It began by producing a first-generation anti-tank guided missile - the French SS11B1.

Its primary mission is to support the country's aerospace and underwater defence needs. BDL develops, manufactures, and sells weapon systems such as surface-to-air missiles, air defence systems, air-to-air missiles, anti-tank guided missiles, and torpedoes.

Launchers, countermeasures, test equipment, and allied defence products are also available from the company. It also performs missile system life extensions and refurbishment. The company also exports its goods to other countries.

4) Mazagon Dock Shipbuilders

Mazagon Dock Shipbuilders Limited (MDL), formerly known as Mazagaon Dock Limited, is a shipyard in Mazagaon, Mumbai. It builds warships and submarines for the Indian Navy, as well as offshore platforms and support vessels for offshore oil drilling. It also constructs tankers, bulk carriers, passenger ships, and ferries.

The company's current design portfolio includes a diverse range of products for both domestic and international clients. MDL has built 799 vessels since 1960, including 26 warships ranging from advanced destroyers to missile boats and six submarines.

MDL also delivered cargo ships, passenger ships, supply vessels, multipurpose support vessels, water tankers, tugs, dredgers, fishing trawlers, barges, and border outposts to customers in India and abroad. MDL has also manufactured and delivered jackets, wellhead platform main decks, process platforms, jack-up rigs, and other components.

5) Cochin Shipyard Ltd.

Cochin Shipyard Limited is an Indian shipbuilding company. It is part of a series of maritime-related facilities in the port city of Kochi, Kerala, India. The shipyard's services include the construction of platform supply vessels and double-hulled oil tankers.

Cochin Shipyard was established as a Government of India company in 1972, with the first phase of facilities opening in 1982. Miniratna status has been granted to the company.

The yard, which has the most extensive such facilities in India, can build up to 1.1 million tonnes and repair vessels up to 1.25 million tonnes. In August 2012, the Government of India announced divestment plans to raise ₹15 billion in capital for further expansion via an Initial Public Offering (IPO) near the end of the fiscal year.

6) Bharat Earth Movers Limited (BEML)

BEML Limited, formerly Bharat Earth Movers Limited, is an Indian PSU headquartered in Bengaluru, Karnataka, India. It produces a wide range of heavy equipment, including that used in earth moving, railways, transportation, and mining.

The business is divided into three main sectors: mining and construction, defence and rail, and metro. A Director serves as the CEO of each of the businesses above and answers to the Chairman & Managing Director of the corporation. The Trading Division also deals in non-company products in addition to those above.

The Tatra-based High Mobility Trucks, Recovery Vehicles, Bridge Systems, Vehicles for Missile Projects, Tank Transportation Trailers, Milrail Wagons, Mine Ploughs, Crash Fire Tenders, Snow Cutters, Aircraft Towing Tractors, and Aircraft Weapon Loading Trolley are just a few examples of the defence ground support equipment that BEML manufactures and provides.

7) Solar Industries Ltd.

In 1995, Solar Industries Limited was a single-site manufacturer; today, it is a well-known industrial explosives manufacturer. They have entered the defence industry and set up one of the world's most integrated facilities for ammunition, thanks to their vast experience, expertise, and potential. This is based on their years of experience in the industrial explosives sector.

Their strategic fusion of talented human capital and technological prowess underpins their innovation edge. They rely on their extensive experience to build lasting value and plan to move quickly toward excellence. They adhere to a full range of strong best practice policies and are devoted to the security, health, and general welfare of their workforce, communities, and environment.

The company operates in more than 65 countries worldwide, with manufacturing facilities in 5 nations. Significant mining and infrastructure firms, including well-known international brands like Coal India Limited, Singareni Collieries, Vedanta Ltd., and many others, are supported by Solar Industries.

8) MTAR Technologies

The company MTAR Technologies Private Limited produces space and nuclear technology equipment. In addition, the business offers testing for fueling machine columns, engines, ball screws, shuttle stations, hydraulic cylinders, and other parts. MTAR Technologies serve Indian clients.

The company primarily serves clean energy, space, and defence clients. The company places a lot of emphasis on the clean-energy market because Bloom Energy, its largest client in the US, generates power using renewable energy sources.

Additionally, the business is a significant supplier of mission-critical assemblies and components to the Indian Space Research Organization (ISRO) and Defence Research and Development Organization (DRDO).

9) Paras Defence and Space Technologies

The most forward-thinking Tier 2 defence engineering company in India, Paras Defence & Space Technologies Limited, proudly introduces itself as providing the broadest range of defence products & solutions.

They are a premier Make-in-India company with unique capabilities in defence electronics, defence & space optics, and defence heavy engineering, from concept to commissioning. They are the only business in India producing large quantities of infrared optics. Most of their nation's esteemed Defense & Space Programs have significantly benefited from the significant contributions made by their company.

Having focused solely on defence engineering for more than 40 years, their steady growth has allowed them to offer the broadest range of products & solutions for defence applications, all under one roof and wholly made in India.

10) Bharat Forge Ltd.

An Indian multinational corporation, Bharat Forge Limited, works in the forging, automotive, energy, building and mining, railroads, marine, aerospace, and defence sectors. On June 19, 1961, Nilkanthrao A. Kalyani established the business.

Bharat Forge Limited (BFL), an Indian multinational company with headquarters in Pune, is a technology-driven global leader in metal forming. With ten manufacturing facilities across the continent, BFL serves a variety of industries, including automotive, power, oil and gas, construction and mining, locomotive, marine, and aerospace.


Finally, it should be noted that the production of lethal goods by the defence industry can sometimes involve covert funding operations or disturbing intelligence gathering. Purchasing Defence Stocks is not wise if you do not wish to support those endeavors.

Similar to many industries, Defence Stocks are frequently slower-moving than biotech or technology stocks. As a result, the best investors for Defence Stocks are income-oriented investors who prefer steady dividend growth over sharp price increases.

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Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

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Research Analyst – Himanshu Sinha


The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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