 "Why All Eyes Are on Defence Sector Stocks?")
Defence production of the country rose to an all-time high of ₹1.46 lakh crore in FY25, up 15% from ₹1.27 lakh crore in FY24.
India’s defence stocks are stealing the spotlight lately. From Cochin Shipyard’s recent surge to Bharat Dynamics’ big gains, investors can’t stop talking about this space. With the government boosting local defence manufacturing and geopolitical tensions rising, this sector is a mix of strategy and opportunity. In this article, let’s understand why all eyes are on defence sector stocks!
Defence Sector: Why the Buzz Around Defence Stocks?
India’s defence sector’s market size is about US$ 18.4 billion in 2025, and it is expected to grow at a CAGR of 5.79%, to US$ 24.4 billion by 2030. The country is on a fast track to strengthening its defence capabilities while building a strong domestic ecosystem.
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Let’s see why there is so much buzz around defence stocks:
Homegrown Make‑in‑India Push
Defence production of the country rose to an all-time high of ₹1.46 lakh crore in FY25, up 15% from ₹1.27 lakh crore in FY24. Over 6.81 lakh crore has also been allocated to India’s defence budget for FY26. This is spurred by security concerns, including recent border tensions.
Despite being the world’s 4th-largest military power, India remains the top arms importer, but that’s also changing. Defence exports saw a surge as they crossed ₹24,000 crore in FY25, rising about 14% from ₹21,083 crore in the previous year. The country aims to hit ₹50,000 crore in exports by 2029.
Under the Make‑in‑India initiative, the government has signed 253 MoUs worth ₹53,439 crore, and over ₹8,658 crore worth of investments have been made towards defence industrial corridors. This regional push is about decentralization, jobs, and boosting innovation.
Strong Market Momentum
In calendar year 2025 so far, the Nifty India Defence index is up nearly 40%, smashing the broader Nifty 50, which rose by around 5% during the same period.
Even over the past three months, the sector has soared about 60%. These returns are grabbing attention, even from casual investors.
Big Events Fueling Investor Interest
Many big events are also adding to the limelight on this sector:
Govt R&D Money & Orders
- Bharat Dynamics Ltd (BDL) saw shares jump by around 6% after news of a ₹40,000 crore R&D push alongside private-sector incentives.
- Bharat Electronics (BEL) secured new orders worth ₹537 crore, boosting investor sentiment. Bharat Electronics share price is currently at around ₹390+
Geopolitical Tensions & Operation Sindoor
The April–May tensions with Pakistan (Operation Sindoor) added urgency. During that period, defence stocks climbed swiftly. Even a ceasefire led to rallies as hopes for stable, long‑term spending grew.
Defence Deals & Global Links
- Cochin Shipyard stock has climbed 32% in just four sessions, hitting ₹2,547 on 6th June 2025, thanks to NATO spending talk and India’s naval build-up.
- Tata Advanced Systems, in partnership with Dassault, will start making Rafale fuselages in Hyderabad, marking the first such overseas build outside France. Production plans begin in FY2028.
Why Investors Are Taking Notice?
Investors are showing interest in defence stocks as they mix stable foundations (government orders) with growth potential (exports, new tech). Financial experts say it’s a smart defensive play for FY26. It is also because India’s defence budget keeps rising year after year. Emergency procurement of $4.6 billion for 26 Rafale marine jets shows the government’s serious support.
Plus, the “Make-in-India” push means taxpayers’ money is invested in local players, not just international firms. There’s been a surge in exports with private players contributing to 21% of defence production, showing India is gaining global confidence.
That said, there are some risks you should keep in mind, like delays in projects, policy changes, and short-term corrections. Make sure to always do your own research before making any investment decisions.
Conclusion
Defence stocks are getting dressed for a long runway. Between strong earnings, government backing, Make‑in‑India momentum, and global demand, the setup is strong. But remember, investing means balancing optimism with patience. Use the scanner share market to compare and pick stocks based on your goals.
