Top 5 Defence Stocks to watch out for in 2025 and beyond – Stock Insights News

Every Indian was filled with pride during Operation Sindoor—a grand demonstration of our military’s increasing potency and technological prowess. But behind that instant stood years of preparation, guided by the government’s steadfast commitment to self-reliance in the defence industry.

With schemes such as Make in India and policy changes like raising FDI caps in the defence sector, India has gradually transformed from being among the globe’s biggest arms importers to developing its own domestic defence manufacturing ecosystem. Defence stocks have consequently experienced sharp investor interest, surging on the crest of policy support, strategic clarity, and a rising defence outlay.

Yet, we’re just getting started. Despite the momentum, India still imports a significant portion of critical systems. That gap between ambition and self-sufficiency creates a long growth runway—making the defence sector a compelling theme for long-term investors.

In this piece, we highlight five defence companies, each part of the NSE Defence Index for one compelling reason: they have the largest order books as of 1 April 2025. In the defence space where contracts last for years and involve a lot of execution, a big order book is more than a statistic—it’s a banner of trust, size, and endurance.

Following are the top 5 Indian defence stock based on order book.

Top Indian Defence Stocks

Company NameMarket Cap (Cr)Order Book (Cr) FY25Hindustan Aeronautics Ltd.3,30,0341,89,300Bharat Electronics Ltd.2,81,46371,650Mazagoan Dock Shipbuilders Ltd.1,39,38838,000Bharat Dynamics Ltd.72,22822,700Garden Reach Shipbuilders & Engineers Ltd.38,64122,652

Source: Company’s Investor Presentation

#1 Hindustan Aeronautics

Hindustan Aeronautics (HAL) now has one of the strongest order books in the Indian defence industry. In April 2025, the firm’s order book was Rs 1,89,300 crore, over six times its FY25 revenue of Rs 30,105 crore. That’s a book-to-bill ratio of over 6.2x, which reflects long-term visibility of revenues. Revenue for FY25, in fact, was barely 16% of the overall order book, reflecting the sheer volume of deliveries pending.

The firm has won significant orders such as the provision of 156 LCH Prachand choppers, 240 AL-31FP engines, and 12 Sukhoi-30MKIs. Additionally, orders for another Rs 1 lakh crore are likely to flow in the next 1–2 years, including orders for 97 LCA Mark 1A aircraft and 143 ALH helicopters.

To address this need, HAL is stepping up its production capacity with a five-year CAPEX spends of Rs 14,000 – Rs 15,000 crore on new platforms such as LCA Mark-2 and GE-414 engines.

Looking to the future, HAL is positioning itself as a major stakeholder in India’s defence self-reliance initiative. With growth plans in Nashik, Tumkuru, and Bengaluru, it is geared to address future requirements not only for the Indian armed forces but also for the export and civil aviation divisions.

Hindustan Aeronautics 1-Year Share Price Chart

Source: Screener.in

#2 Bharat Electronics

Incorporated in 1954, Bharat Electronics (BEL) manufactures and supplies electronic equipment and systems to the defence sector. The company also has a limited presence in the civilian market.

BEL closed FY25 with an order book of Rs 71,650 crore, a 12% year-on-year growth. Having achieved FY25 revenue of Rs 23,024 crore, the order book is now more than 32% of annual revenue—reflecting good execution visibility. The company is looking to add new orders of Rs 27,000 crore in FY26, with a potential upside of Rs 30,000 crore additional if the QRSAM contract happens during the year.

Management has provided revenue growth guidance of 15% for FY26 and reaffirmed its objective of maintaining earnings before interest, tax, depreciation, and amortisation (EBITDA) margins at about 27%. BEL is targeting large orders such as QRSAM, Project Kusha (indigenous S-400), and Next-Generation Corvettes, and aims to go deeper from subsystem supplier to full-fledged system integrator.

In addition, Rs 1,000 crore-plus yearly capex and Rs 1,600 crore R&D outlays are projected to increase infrastructure scope and accelerate innovation within. With an emphasis on indigenization, export, and shorter execution cycles after Operation Sindoor, BEL is poised to remain the driver of India’s defence modernization agenda.

Bharat Electronics 1-Year Share Price Chart

Source: Screener.in

#3 Mazagon Dock Shipbuilders

Mazagon Dock Shipbuilders (MDL), Mumbai, established in 1774, is a prominent shipyard in India. Initially a small dry dock, MDL has evolved into a renowned shipbuilding company. It has constructed 801 vessels since 1960, including warships, submarines, cargo/passenger ships, and offshore platforms.

MDL had a healthy order book of Rs 38,000 crore on March 31, 2025, which is almost 6.5 times its FY25 revenue of Rs 5,842 crore. This suggests that only around 18.2% of the current order book has been converted into revenue, with high visibility of long-term revenues. The order book comprises big naval orders like Project 17A frigates and the ongoing Scorpene-class submarine constructions.

In the future, MDL is focused on both defence and civilian shipbuilding orders. The company has quoted for another Rs 45,000 crore worth of navy orders, including Next-Gen Destroyers and future-generation submarines, and is also looking at export prospects to friendly countries.

With robust execution momentum, increased margins, and labour force and facilities ramp-up, MDL intends to double throughput by FY28. Strategic alliances and capacity augmentation form the core of its growth strategy as it targets to be a global leader in naval shipbuilding.

Mazagon Dock Shipbuilders 1-Year Share Price Chart

Source: Screener.in

#4 Bharat Dynamics

Bharat Dynamics (BDL), is a Government of India Enterprise. It is engaged in the manufacturing of guided missiles and allied defence equipment.

BDL had an order book of Rs 19,434 crore as on March 31, 2024, against Rs 2,369 crore of revenue from operations in FY24. This suggests that the revenue earned during the year was merely around 12% of the overall order book, reflecting good visibility and multi-year execution potential. Moreover, BDL anticipates approximately Rs 20,000 crore of new orders lined up over the next 2–3 years.

The financial performance of the company is strong, with FY24 PAT up 74% y-o-y at Rs 613 crore and EBITDA margins increasing to 22.6%. BDL is co-developing cutting-edge defence systems like the Man-Portable Anti-Tank Guided Missile and Advanced Light Weight Torpedoes, several of which have successfully undergone user trials.

Looking ahead, BDL intends to ramp up exports, with Rs 2,420 crore worth of orders already in hand and further potential across products such as Akash SAM, NAG, Astra, and CMDS. The corporation is also investing in R&D (3.18% of turnover in FY24) and capacity augmentation, in line with India’s indigenous defence manufacturing drive and bolstered global defence exports.

Bharat Dynamics 1-Year Share Price Chart

Source: Screener.in

#5 Garden Reach Shipbuilders and Engineers

Garden Reach Shipbuilders & Engineers (GRSE) is a premier shipbuilding company in India under the administrative control of the Ministry of Defence, primarily catering to the shipbuilding requirements of the Indian Navy and the Indian Coast Guard.

GRSE is a diversified, profit making and the first Shipyard in the country to export warships and deliver 100 warships to the Indian Navy and Indian Coast Guard.

It reported a strong closing order book of Rs 24,318 crore as on March 31, 2025. This is almost 6.8 times its FY25 revenue of Rs 3,583 crore, meaning that it has only monetized about 15% of its pipeline till now—reflecting good revenue visibility in the next few years.

The order book has landmark naval contracts like Next-Generation Offshore Patrol Vessels (NGOPVs), ASW Shallow Water Crafts, and Survey Vessels. GRSE has charted an aggressive growth plan.

The company is eyeing Rs 5,000 crore revenue in FY27 through expansion of operations, productivity, and export-led growth. Its future projects are the Next-Gen Corvettes and ongoing participation in the Make-in-India defence drive.

To fund this vision, GRSE is investing in digitalization, adopting Industry 4.0 practices, and developing modular construction capabilities. It is also enhancing its ship repair segment and concentrating on export orders, such as patrol boats for friendly nations.

With minimal debt, high margins, and an expanding global presence, GRSE is positioning itself as an integral part of India’s maritime defence manufacturing ecosystem.

Garden Reach Shipbuilders and Engineers 1-Year Share Price Chart

Source: Screener.in

Conclusion

India’s defence industry is attracting unprecedented focus as the country pushes its vision of strategic autonomy. Supported by government efforts, export aspirations, and growing defence budgets, the sector has evidenced strong fundamentals—seen in healthy order books, enhancing margins, and multi-year visibility for top players. R&D investments, capacity additions, and digitalization further set the sector up for sustained growth.

All that aside, the defence industry is not without its nuances. Project timetables, policy changes, and geopolitical tensions can affect profitability and valuations. As renowned investor Peter Lynch succinctly stated, “Know what you own, and know why you own it.” Investors would do well to consider both the promise and the peril before assuming exposure to this strategic but sensitive space.

Disclaimer:

Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information. 

The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only. 

Ekta Sonecha Desai has a passion for writing and a deep interest in the equity markets. Combined with an analytical approach, she likes to deep deep into the world of companies, studying their performance, and uncovering insights that bring value to her readers.

Disclosure: The writer and his dependents do not hold the stocks discussed in this article. 

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