Best Defence Stocks In India In July 2025: HAL, BDL, Nibe, Sika, and More- Based on 5-Year CAGR

India ranks 4th globally in military strength, according to the Global Power Index, with a firepower score of 0.0979, where a lower score indicates greater capability. To enhance defence self-reliance, the Indian government has targeted a defence production value of US$25 billion by 2025, including US$5 billion from exports.

India remains one of the world’s largest defence spenders. In the Union Budget 2024–25, it allocated US$74.8 billion (₹6.21 lakh crore) to defence, comprising 13.04% of the total budget. This reflects a 4.72% increase from 2023–24 and an 18.35% rise over 2022–23. In 2022, India’s defence spending reached US$81.4 billion, marking a 6% year-on-year increase and securing the fourth spot globally. For FY 2023–24, India’s defence production reached ₹1,27,265 crore (around US$15.37 billion), with public sector units contributing ₹74,434 crore (US$8.99 billion).

This article explores the leading defence stocks in India as of July 2025, ranked by their 5-year CAGR, market capitalisation, and net profit margin.

Best Defence Stocks in July 2025- Based on 5-Year CAGR

Note: The best defence stocks in July 2025 here are as of June 25, 2025 and are sorted based on the 5Y CAGR.

Overview of Defence Stocks in India in July 2025

1. Nibe Ltd

Founded in 2005, Nibe Ltd operates in both the defence and electric vehicle (EV) sectors, offering specialised components and also engaging in software development. It manufactures fabricated and machined parts for defence applications and assembles EV components. 

In the March 2025 quarter, Nibe Ltd reported a revenue of ₹106.09 crore and a net profit of ₹6.88 crore, compared to ₹138.88 crore revenue and ₹2.82 crore profit in December 2024. 

Key Metrics:

• EPS: ₹18.60
• ROE: 12.47%

2. Sika Interplant Systems Ltd

Sika offers engineered systems, electrical modules, MRO services, and distributes value-added components.

In the March 2025 quarter, Sika Interplant Systems Ltd recorded a revenue of ₹43.92 crore and a net profit of ₹8.23 crore, compared to ₹37.98 crore revenue and ₹6.63 crore profit in December 2024. 

Key Metrics:

• EPS: ₹12.35
• ROE: 23.80%

3. Taneja Aerospace and Aviation Ltd

Established in 1994, Taneja Aerospace and Aviation Ltd is engaged in the production and sale of aircraft parts and components. The company also offers services in Airfield operations, Maintenance, Repair, and Overhaul (MRO), along with related support services for the aviation sector.

In the March 2025 quarter, Taneja Aerospace and Aviation Ltd reported a revenue of ₹12.38 crore and a net profit of ₹6.12 crore. In the December 2024 quarter, the company posted ₹8.97 crore in revenue and ₹4.40 crore in profit. 

Key Metrics:

• EPS: ₹7.09
• ROE: 13.10%

4. Bharat Dynamics Ltd (BDL)

BDL is a defence manufacturer specialising in guided missiles, underwater weapons, and various military systems, serving primarily the Indian Armed Forces.

In the March 2025 quarter, Bharat Dynamics Ltd reported revenue of ₹1,776.98 crore and a net profit of ₹217.70 crore. In the December 2024 quarter, the company recorded revenue of ₹832.14 crore and net profit of ₹147.13 crore. 

Key Metrics:

• EPS: ₹13.49
• ROE: 13.25%

5. Hindustan Aeronautics Ltd (HAL)

HAL is a leading player in the production of aircraft and helicopters, also providing maintenance and overhaul services.

In the March 2025 quarter, Hindustan Aeronautics Ltd recorded revenue of ₹13,699.87 crore and a net profit of ₹3,958.25 crore. For the December 2024 quarter, the company reported revenue of ₹6,956.93 crore and net profit of ₹1,432.60 crore. 

Key Metrics:

• EPS: ₹124.36
• ROE: 26.75%

Best Defence Stocks in July 2025- Based on Market Cap

Note: The best defence stocks in July 2025 here are as of June 25, 2025 and are sorted based on the market cap.

Best Defence Stocks in July 2025- Based on Net Profit Margin

Note: The best defence stocks in July 2025 here are as of June 25, 2025 and are sorted based on net profit margin.

Read More: How to Buy NSE Unlisted Shares in India?

Key Considerations Before Investing in Defence Stocks

Geopolitical Factors

Defence stocks are sensitive to global events—border conflicts, diplomatic shifts, and geopolitical tensions can significantly affect valuations and investor sentiment.

Policy and Regulation

As a highly regulated sector, defence companies operate under strict procurement policies, licensing norms, and FDI rules. Understanding these regulatory dynamics is essential for evaluating a company’s operational prospects.

Impact of Budgetary Support

India’s steadily rising defence budget creates expansion opportunities, particularly for firms engaged in cutting-edge technology, R&D, and exports. Companies aligned with government focus areas are likely to benefit the most.

Risks Linked to Defence Sector Investments

• Geopolitical Volatility: Conflicts and wars can create unpredictable market reactions.
• Policy Uncertainty: Sudden changes in government priorities may disrupt long-term projects.
• Stringent Compliance: Regulatory hurdles could limit operational flexibility.
• Reliance on Defence Contracts: Many players depend heavily on government orders, which are vulnerable to delays or cancellations.

Future Outlook for India’s Defence Industry

• Strong Policy Push: The government’s ₹6 lakh crore investment plan signals robust support for the sector.
• Tech-Driven Expansion: Emerging technologies like AI, autonomous systems, and smart weapons are likely to reshape the defence landscape.
• Global Collaborations: Increased foreign investment and partnerships are enhancing domestic capabilities and market reach.

Conclusion

Defence stocks hold long-term promise, but investors must assess each company’s future readiness, financial health, and risk exposure. A detailed, well-informed strategy—ideally backed by expert consultation—can help make the most of this high-potential yet complex sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.