India’s defence sector has seen a massive transformation since 2014, focusing on Atmanirbhar Bharat through domestic manufacturing. In FY 2023-24, India achieved record defence production of ₹1.27 lakh crore—up 174% from 2014-15—and aims to reach ₹3 lakh crore by 2029. The defence budget has grown to ₹6.21 lakh crore in 2024-25, with strong policy support under “Make in India.”
Defence exports surged from ₹1,941 crore in 2014-15 to ₹21,083 crore in 2023-24, a 21-fold rise over the decade. India now exports to over 100 countries, with top buyers including the USA, France, and Armenia. The 2029 export target is ₹50,000 crore.
| Company | 5Y Profit CAGR (%) |
| Astra Microwave | 105.05 |
| Data Pattern | 87.32 |
| Zen Technologies | 56.87 |
| BEML Ltd | 34.83 |
Note: The best defence stocks list is as of May 2, 2025. The stocks are sorted based on the 5Y CAGR.
| Company | Debt/Equity |
| Hind. Aeronautics | 0 |
| Bharat Electron | 0 |
| Mazagon Dock | 0 |
| Garden Reach | 0.01 |
| Zen Technologies | 0.04 |
Note: The best defence stocks list is as of May 2, 2025. The stocks are sorted based on the debt-to-equity ratio.
| Company | Market Cap (₹ Cr) | PE Ratio |
| Hind. Aeronautics | 3,00,139.53 | 34.71 |
| Bharat Electron | 2,29,600.15 | 46 |
| Mazagon Dock | 1,23,337.47 | 44.83 |
Note: The best defence stocks list is as of May 2, 2025. The stocks are sorted based on market capitalisation and PE ratio.
Mazagon Dock is one of India’s premier defence shipbuilders which holds Navratna status. It is the only Indian shipyard with advanced shipbuilding capabilities. As of Q2 FY25, it has a robust order book worth ₹39,872 crore, covering 37 vessels. Financially, the company boasts of zero debt and a healthy 5-year profit CAGR. Its strategic importance and strong balance sheet make it one of the prominent companies in India’s defence sector.
Key metrics:
HAL is engaged in manufacturing and maintaining aircraft, helicopters, and engines. With a strong ₹94,000 crore order book in FY24 and significant contracts worth ₹60,000 crore received, HAL plays a strategic role in India’s defence sector. Strong EBITDA margins (26–27%) and expected orders worth ₹1.6–1.7 lakh crore over 3 years make HAL an attractive company.
Key metrics:
Zen Technologies Ltd is a leader in defence training and counter-drone solutions. It holds a 95% market share in tank simulators and a strong ₹1,401 Cr order book (FY24). It serves the Ministry of Defence and has a growing global presence. Despite facing short-term supply challenges, Zen is deploying innovative technology to stregthen its business outlook.
Key metrics:
Astra Microwave Products Ltd. specialises in designing and developing RF and microwave systems. These systems find applications in the defense, space, and telecom industries. The company’s revenue mix has shifted, with defense contributing 65% in Q1 FY25, up from 45% in FY22. Its order book reached ₹2100 Cr in Q1 FY25, driven by domestic high-margin orders.
Astra is focusing on expanding its capabilities in anti-drone, electro-optics, and radar systems. It aims for a revenue target of Rs. 2000 Cr in 5-6 years, diversifying into meteorology and space while increasing value-added system revenues from 20% to 50%.
Key metrics:
Data Patterns (India) Ltd is a leading defense and aerospace electronics company with over 35 years of experience. It specializes in designing and manufacturing solutions for air, land, sea, and space platforms, including products for the BrahMos missile, LCA-Tejas, and the Light Utility Helicopter.
With a strong focus on R&D, Data Patterns is heavily dependent on government contracts, with major clients including DRDO, ISRO, and BEL. The company is investing in satellite, radar, and communication technologies, aiming for 25%+ revenue growth from FY25-27.
Key metrics:
India’s defence sector is booming with record production and exports, backed by policy support and rising demand. Leading companies like HAL, Mazagon Dock, and Astra Microwave offer strong growth potential based on financials, innovation, and strategic contracts—making defence stocks a compelling opportunity for investors in May 2025 and beyond.
Read more on: Top 10 Blue Chip Stocks in May 2025: Adani Enterprises, BEL, Trent and More- 5Yr CAGR Basis
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.
Published on: May 2, 2025, 9:26 AM IST
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