Indian defence sector stocks, which had recently corrected from their highs, have again been soaring over the past weeks, much of it due to the recent flare-up of tensions with Pakistan. The successful display of India’s indigenously developed systems against the adversary last week also lent support to the defence stocks basket.
The conflict with Pakistan also alluded to the fact that it is critical to achieve self-reliance in defence manufacturing.
The Nifty India Defence index has climbed over 30 per cent over the past three months, reflecting investor confidence in the strategic importance and commercial growth of India’s domestic defence sector.
The Nifty India Defence index tracks listed companies that derive a significant proportion of their revenues from the sale of defence-related products and services.
As per the Nifty India Defence factsheet of April 30, 2025, the top five constituents by weightage of the index include Hindustan Aeronautics, Bharat Electronics, Solar Industries India, Mazagon Dock Shipbuilders, and Bharat Dynamics. The index includes 18 defence stocks.
The Indian government has taken several policy initiatives in the past few years and introduced reforms to encourage indigenous design, development, and manufacture of defence equipment, thereby promoting self-reliance in defence manufacturing.
With the government’s thrust on the Make in India initiative, defence production has surged to historic highs. This rise in defence manufacturing has also led to substantial returns for investors in major defence manufacturing PSUs over the past years.
As part of its Atmanirbhar and Make in India plans, the government launched production incentive (PLI) schemes in various sectors to make Indian manufacturers globally competitive, attract investments, enhance exports, integrate India into the global supply chain, and reduce dependency on imports.
The government is also investing heavily in defence and aerospace manufacturing, with several defence hubs being set up. Notably, many global companies have either shared or shown intent to share critical defence and aerospace knowledge with India.
India’s defence exports have surged to a record high of Rs 23,622 crore (approximately USD 2.76 billion) in the financial year 2024-25. A growth of Rs 2,539 crore or 12.04 per cent has been registered in the just-concluded fiscal over the defence exports figures of 2023-24, which were Rs 21,083 crore, according to data made available by the Ministry of Defence.
The Defence Public Sector Undertakings (DPSUs) showed a significant increase of 42.85 per cent in their exports in FY 2024-25, reflecting the growing acceptability of Indian products in the global market and the ability of the Indian defence industry to be part of the global supply chain.
The private sector and defence PSUs have contributed Rs 15,233 crore and Rs 8,389 crore, respectively, in defence exports of 2024-25, whereas the corresponding figures for 2023-24 were Rs 15,209 crore and Rs 5,874 crore, respectively.
These data proves that India has evolved from a largely import-dependent military force to one increasingly focused on self-reliance and indigenous production. In a major boost to defence exports, a wide range of items, including ammunition, arms, subsystems/systems, and parts and components, were exported to around 80 countries in the just-concluded financial year, according to the Ministry of Defence data.
Following are some of the listed defence companies and their cumulative rise in shares (in percentage terms) over the past five years:
According to data from the National Stock Exchange (NSE), the shares of defence manufacturing companies Hindustan Aeronautics, Cochin Shipyard, Bharat Electronics, Solar Industries, and Bharat Dynamics have shot up in the range of 1,100-1,650 per cent over the past five years. Similarly, shares of other listed defence companies also shot up, though with a varying degree. (ANI)
