Top 5 Best Defence Stocks in India

30 November 2023
6 mins read
by Angel One
Explore the best defence stocks in India, crucial for national security. Learn about the industry's growth, recent budget allocations, and more.
Top 5 Best Defence Stocks in India

Embarking on the journey of stock market investing is a pivotal step towards financial growth. Among several sectors, one of the most popular is the defence sector. Defence stocks in India represent companies that are crucial to national security. These stocks encompass various facets, from aerospace and military technology to equipment manufacturing. 

As India prioritises strengthening its defence capabilities, you can find the companies involved in this sector and potential opportunities. In this article, find the best defence stocks in India and also learn about the growth of the industry. 

List of 10 Best Defence Stocks in India

Name Market Cap (₹ in crore) PE Ratio 5Y CAGR (%)
Solar Industries India Ltd 61,410.17 81.10 45.94
Hindustan Aeronautics Ltd 1,49,825.66 25.71 41.25
Bharat Electronics Ltd 1,02,592.74 34.38 35.04
Bharat Dynamics Ltd 21,246.88 60.33 32.72
BEML Ltd 9,967.19 63.11 26.10
Cochin Shipyard Ltd 14,754.89 48.42 24.33
Bharat Forge Ltd 51,938.74 98.30 13.86
Mazagon Dock Shipbuilders Ltd 41,141.73 36.77
MTAR Technologies Ltd 6,851.08 66.25
Paras Defence and Space Technologies Ltd 2,730.98 75.73

Note: The list of the top defence stocks in India in 2023 is as of November 28, 2023, and is sorted as per the 5-year CAGR. 

  • Solar Industries India Ltd

Solar Industries India Limited is involved in the manufacturing, supplying and exporting of industrial explosives and initiating systems. The company has a 1-year return of 78.02%, and the Return on Investment (ROI) is 21.48%. 

  • Hindustan Aeronautics Ltd (HAL)

This is a large-cap company that manufactures, repairs and is involved in the maintenance of aircraft and helicopters. HAL is a state-owned aerospace and defence company in India. The company has a 1-year return of 62.19%, and the ROI is 24.94%. 

  • Bharat Electronics Ltd

Bharat Electronics Limited is a large-cap company that is involved in the design, manufacturing, and supply of electronics products and systems for defence and nondefense markets. Their primary products are weapon systems, fire control systems, radars, etc. The company has a 1-year return of 30.68%, and the ROI is 21.54%. 

  • Bharat Dynamics Ltd

This is a small-cap company that designs and manufactures underwater-guided weapon systems. Bharat Dynamics Limited has a 1-year return of 22.18%, and the ROI is 11.11%. 

  • BEML Ltd

BEML Limited is a small-cap company involved in the manufacturing of rail coaches, spare parts and mining equipment. They cater to sectors including mining, construction, rail, metro and defence. The company has a 1-year return of 63.74%, and the ROI is 7.39%. 

  • Cochin Shipyard Ltd

This is a small-cap company that manufactures and repairs ships. Cochin Shipyard Limited has a 1-year return of 72.86%, and the ROI is 6.94%. 

  • Bharat Forge Ltd

Bharat Forge Limited is a mid-cap company that is involved in the business of steel forgings, front axle assembly, and finished machined crankshafts. The company has a 1-year return of 29.86%, and the ROI is 5.88%. 

  • Mazagon Dock Shipbuilders Ltd

This is a mid-cap company that manufactures and repairs ships for navy and commercial operators. Mazagon Dock Shipbuilders Limited has a 1-year return of 131.34%, and the ROI is 23.67%. 

  • MTAR Technologies Ltd

MTAR Technologies Limited is a small-cap company involved in the manufacturing of mission-critical precision and heavy equipment. The company has a 1-year return of 15.45%, and the ROI is 36.42%. 

  • Paras Defence and Space Technologies Ltd

This is a small-cap company that develops systems for defence and space applications. Paras Defence and Space Technologies Limited has a 1-year return of 13.84%, and the ROI is 10.23%. 

Recent Growth of the Defence Sector in India

In Budget 2022-23, the allocation to the defence ministry was raised to $70.6 billion. There are several reasons why this increase in defence expenditure took place – the geopolitical reasons being the standoff against China in Ladakh and the spectacle of Russian equipment failing to perform well in Ukraine. The latter situation showed India three things – 

  • Availability and production of foreign equipment can be restricted at times when they are needed the most. The Russians are failing to replace their used precision weapons as some of the parts are made in other countries, who are now refusing or unable to supply them.
  • Russian equipment, which comprises a major portion of the Indian Armed Forces, seems to perform not as well as the Western weapon systems.
  • Western equipment, although of high quality, is extremely costly and hard to produce quickly in a mass – supplies to Ukraine have been slow as Western countries are reluctant to supply costly equipment that is also hard to replace in the short run.

Therefore, it is no surprise that the Indian government has been emphasising ‘Make in India’ in defence production. The fifth positive indigenisation list (composed of 98 items) was released by the defence ministry in October 2023, which will curtail defence imports. Indian companies (both public and private) are also increasingly investing in defence technologies (such as drones, armoured vehicles, and rockets) to slowly expand their capability in defence production. 

Defence stocks can be a well-rewarding investment in this scenario. War or no war, as the Indian economy grows, defence expenditure and orders for defence equipment and consultancy will surely grow in India and beyond in the coming years. With growing defence expenditure and geopolitical tensions, Indian defence companies are sure to garner both domestic government and export orders. 


Investing in defence stocks can offer a unique avenue for financial growth while contributing to the nation’s security. As the Indian defence sector evolves, investors can navigate this landscape for potential returns. However, make sure to consider your investment objective and risk appetite before proceeding further. Diversify your investment portfolio well to balance the risks. For those ready to embark on their investment journey, open a Demat Account with Angel One for free today. 


What are defence stocks?

Defence stocks represent shares in companies engaged in the production and supply of military and aerospace equipment essential for national security. These companies contribute to the defence sector by manufacturing weaponry, electronics, and other defence-related products.

How to research the best defence stocks?

You can research defence stocks by analysing financial reports, understanding government contracts, and staying informed about political events impacting the defence sector.

What are the risks associated with defence stocks?

Risks include budgetary constraints, regulatory changes, and geopolitical tensions impacting defence budgets. Conduct thorough research and consider diversification to mitigate risks.

Can individual investors buy defence stocks?

Yes, individual investors can buy defence stocks through stock exchanges. Use a reliable brokerage platform like Angel One to explore stocks and their details.

Do defence stocks pay dividends?

Dividends on stocks are not limited to any sector. Some defence companies pay dividends, offering investors regular income. Check the dividend history of specific stocks before investing.