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

As per the Global Power Index, India holds the fourth position in global military strength, with a firepower score of 0.0979—where a lower score reflects superior capability. To boost self-reliance in defence, the Indian government has set a production goal of US$ 25 billion by 2025, with US$ 5 billion expected from exports.

India continues to rank among the top global defence spenders. In the Union Budget for 2024-25, it earmarked US$ 74.8 billion (₹6.21 lakh crore) for defence, accounting for 13.04% of the total budget. This allocation marks a 4.72% rise compared to 2023-24 and an 18.35% jump over the 2022-23 budget. Back in 2022, India’s defence expenditure was US$ 81.4 billion—up by 6% year-on-year—ranking it fourth in global military spending. For FY 2023-24, India’s total defence production was valued at ₹1,27,265 crore (approximately US$ 15.37 billion), with state-run PSUs contributing ₹74,434 crore (US$ 8.99 billion).

This article presents a detailed look at India’s top defence stocks as of June 2025, with rankings based on their 5-year CAGR performance, market cap and net profit margin.

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

Note: The best defence stocks in June, 2025 here is as of May 29, 2025 and are sorted based on the 5Y CAGR. 

Overview of the Defence Stocks in India in June 2025

1. Nibe Ltd

Established in 2005, Nibe Ltd manufactures specialised components for the defence and electric vehicle (EV) industries, while also working in software development. It produces fabricated and machined parts for defence, assembles EV components, and promotes innovation through its EV-focused BVM R&D Foundation.

In Q3 FY25 (December 2024 quarter), Nibe Ltd posted revenue of ₹138.88 crore and net profit of ₹2.82 crore, compared to ₹127.22 crore revenue and ₹9.40 crore profit in Q2 FY24 (September 2024).

Key metrics:

• Earning per Share (EPS): ₹22.25
• Return On Equity (ROE): 14.92%

2. Sika Interplant Systems Ltd

Sika Ltd provides engineered systems and projects, interconnect and electrical module solutions, MRO services, and distribution of value-added components.

For Q3 FY25, it reported revenue of ₹37.98 crore and net profit of ₹6.63 crore, up from ₹33.24 crore and ₹6.03 crore, respectively, in Q2 FY24.

Key metrics:

• EPS: ₹11.35
• ROE: 21.87%

3. Hindustan Aeronautics Ltd (HAL)

HAL is a prominent manufacturer of aircraft and helicopters and also offers maintenance and repair services. 

In Q3 FY25, HAL reported revenue of ₹6,956.93 crore and net profit of ₹1,432.60 crore. In comparison, Q2 FY24 saw revenue of ₹5,976.55 crore and net profit of ₹1,490.36 crore.

Key metrics:

• EPS: ₹129.35
• ROE: 27.83%

4. Bharat Dynamics Ltd (BDL)

BDL produces underwater weapons, guided missiles and defence equipment. It primarily supplies to the Indian Armed Forces.

In Q3 FY25, BDL reported revenue of ₹832.14 crore and net profit of ₹147.13 crore, an increase from Q2 FY24, where it posted ₹544.77 crore revenue and ₹122.53 crore net profit.

Key metrics:

• EPS: ₹15.43
• ROE: 15.16%

Read More, Best Railway Stocks for June 2025 Based on 5-Yr CAGR: Rail Vikas, IRCTC, Jupiter Wagons & More.

Best Defence Stocks in June 2025- Based on Market Cap

Note: The best defence stocks in June, 2025 here is as of May 29, 2025 and are sorted based on the market cap. 

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

Note: The best defence stocks list in June, 2025 here is as of May 29, 2025 and are sorted based on the net profit margin. 

Key Factors to Evaluate Before Investing in Defence Stocks

• Geopolitical Tensions

The defence sector is highly reactive to international conflicts, border tensions, and diplomatic changes. These elements can impact stock valuations and sectoral performance.

• Regulatory Framework

Since defence is a heavily regulated sector, policies related to procurement, licensing, and FDI must be carefully assessed to understand their impact on company operations.

• Growth from Budget Allocations

A continuous increase in India’s defence budget offers opportunities for defence companies. Firms aligned with government spending, especially in advanced tech and exports, are likely to benefit.

Risks Associated with Defence Stocks

• Geopolitical Instability: Tensions and wars can lead to volatile markets.
• Policy Uncertainty: Sudden shifts in government priorities can delay growth.
• Heavy Regulation: Compliance challenges may restrict company operations.
• Dependence on Contracts: Many defence firms rely on government orders, which could be postponed or cancelled.

Outlook for India’s Defence Industry

• Strong Government Support: Planned investments of ₹6 lakh crore will propel the industry’s development.
• Innovation-Led Growth: New technologies like AI, drones, and smart weaponry will enhance sector capabilities.
• International Collaboration: Increased FDI and global tie-ups are strengthening domestic players.

Conclusion

Investing in defence stocks involves analysing not just past performance, but also future potential, financial resilience, and exposure to risks. A comprehensive, research-driven approach supported by expert advice can help investors tap into the long-term opportunities in this strategic 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.