Aerospace and Defence Stocks in India

Aerospace and defence stocks are the shares of business enterprises involved in developing and distributing equipment to military forces. Investing in such stocks could prove to be a wealth-generating opportunity for investors. Aerospace and defence companies in India play a vital role in enhancing national security. They tend to be resilient during economic slowdowns. Use proper research and analysis to add this stable and growing sector to your portfolio. 

Indian Defence Sector: An Overview

The Indian defence sector is an integral part of the economy, contributing to the country’s growth and rise in GDP (Gross Domestic Product). Multiple government initiatives have prioritised local manufacturing in this promising sector, including Atma Nirbhar Bharat, Make in India, and a liberalised FDI policy. 

India consistently increases its spending yearly to become the biggest defence spender worldwide. With an effective growth perspective, the market size of this sector is estimated to be $17.40 billion in 2024. India exports its aerospace and defence products to more than 85 nations worldwide. The government has also increased capital allocation for the Indian defence sector by 9.4%. Thus, it could help top defence stocks in India to deliver healthy returns in the coming years. 

Future Outlook: Setting a high target might improve the final result. India aims to reach a turnover of $26 billion in the aerospace and defence sector by the end of 2025 and is focusing heavily on its infrastructural development. Rising awareness and continuous government support will make aerospace and defence stocks a secure investment choice. 

Top Aerospace and Defence Stocks List

*Data is updated as of 28th November 2024

Overview of Defence Stocks

Here is an overview of aerospace and defence stocks in India to help you better understand them. Explore before investing your invaluable money in the stock market. 

1. Hindustan Aeronautics Ltd.

Hindustan Aeronautics Ltd., or HAL, was founded in 1940 as an aircraft manufacturer. The company is headquartered in Banglore, with over 21 manufacturing divisions and 4 production facilities across the country. HAL received the status of Maharatna in 2024 as one of the leading manufacturers of helicopters, jet engines, marine gas turbines, and fighter jets. This status helped this organisation to get financial autonomy.  HAL generate more than 40% of its revenue through international markets by selling aircraft engines and spare parts. 

The market capitalisation of this one of the top defence stocks in India is INR 2,95,000 crores, and its PE (Price-to-Earnings) ratio is 35.28. The government owns a 71.65% stake in this company and operates it under the Ministry of Defence. 

2. Bharat Electronics Ltd.

Bharat Electronics Ltd. was founded in 1954 and has a rich legacy of over 70 years in the Indian aerospace and defence sector. The company is headquartered in Bangalore and operates under the Ministry of Defence. GOI (Government of India) holds around 51.14% of the stake in BEL. LIC and Bank of Baroda are the other major shareholders of this prominent organisation. 

Recently, in September 2024, BEL and Space Application Centre collaborated with an MoU (Memorandum of Understanding) to develop travelling wave tube amplifiers. The market capitalisation of BEL is INR 2,20,000 crores, and its PE (Price-to-Earnings) ratio is 49.46, making it one of the top defence stocks in India.   

3. Mozagon Dock Shipbuilders Ltd.

Mozagon Dock Shipbuilders Ltd. was founded in 1934 and is currently headquartered in Mumbai. The product segment of this company includes naval ships, tankers, patrol boats, and submarines. The Ministry of Defence manages this organisation as the government holds around 84.83% of its stake. The company has gained recognition as the second Indian shipyard to sign up an MSRA with the government of the United States of America. 

With an impeccable order book and cash flow position, Mozagon Dock is becoming one of the favourable stocks in the Indian defence sector. Not specifically in aerospace, it has proved to be one of the top defence stocks in India, with a market capitalisation of INR 89,960 crores and a PE (Price-to-Earnings) ratio of 35.49. 

4. Bharat Dynamics Ltd.

Bharat Dynamics Ltd., or BDL, was founded in 1970 and is headquartered in Hyderabad. The company began its operations by manufacturing French SS11B1, an anti-tank guided missile. The manufacturing facilities of this organisation are in Andhra Pradesh, Medak, and Hyderabad. BDL is known for its effective R&D (Research and Development) capabilities to deliver ammunition and missile systems for the Indian Armed Force and Indian Air Force. 

GOI owns this company with a stake of 74.93%, and it is administered under the Ministry of Defence. The market capitalisation of BDL is INR 40,850 crores, and its PE (Price-to-Earnings) ratio is 76.78. Investors consider such top defence stocks as the best options for generating returns in the long term. 

5. BEML Ltd.

BEML Ltd. is another Indian PSU founded in 1964. It is currently headquartered in Bangalore and has manufacturing plants in Bangalore, Mysore, KGF (Kolar Gold Fields), and Palakkad. In addition to the aerospace and defence sector in India, BEML also operates in the mining, construction, railway, and metro industries. 

In 2020, Rajnath Singh, Defence Minister of India, inaugurated the IDC (Industrial Design Centre) at BEML to enhance the R&D practices for manufacturing different types of equipment. The market capitalisation of BEML Ltd. is INR 17,480 crores, and its PE (Price-to-Earnings) ratio is 62.42, making it one of the top defence stocks in India.  

6. Data Patterns (India) Ltd.

Data Patterns (India) Ltd. is an aerospace and defence company founded in 1985 and is currently headquartered in Chennai, Tamil Nadu. For the key players operating in the Indian Defence sector, Data Patterns (India) Ltd. set an example that India is filled with ultimate growth opportunities in the aerospace and defence sector, and one should know how to utilise them optimally. 

The market capitalisation of Data Patterns (India) Ltd. stands at INR 13,560 crores, and its PE (Price-to-Earnings) ratio is 74.62. Investors expect a potential upside in this stock because of its effective order book and robust financial performance. 

7. Paras Defence and Space Technologies Ltd.

Paras Defence and Space Technologies Ltd. is an aerospace and defence company in India founded in 2009. It is headquartered in Mumbai and is the only company in India that manufactures infrared optics in bulk. Paras Defence & Space Technologies is highly committed to the government’s initiative of Make in India. It went public in the year 2021 by issuing an IPO (Initial Public Offer) to receive significant attention and raise its capital.  

The market capitalisation of this one of the top defence stocks in India is INR 4,070 crores, and its PE (Price-to-Earnings) ratio is 92.16. The company is poised to grow significantly with a diverse range of product segments.

Aerospace and Defence Stocks List With PE Ratio

*Data is updated as of 28th November 2024

How to Invest?

Investing in defence stocks can add wealth. However, a few people still need clarification on the steps to consider when investing. Explore the steps mentioned below to have a seamless investing experience. 

• Identify your goals behind the investment and analyse the path to achieve them. 
• Research top defence stocks in India or consult a stock advisory platform to choose the best one. 
• Select the fundamentally strong shares to diversify your portfolio and place a buy order through your demat account. 
• Execute the order and track your portfolio for returns. 

Note:  Invest safely with the Univest app to generate higher returns with the best stock recommendations. 

To Conclude

Rising defence spending and public-private partnerships are the factors behind significant growth in the Indian defence sector. Investors looking for high-potential stocks, in the long run, can consider this a promising sector in which to generate wealth. Top defence stocks in India are increasingly becoming popular among investors because of their strong, resilient nature during economic downturns. Giant players include Hindustan Aeronautics Ltd., Bharat Electronics Ltd., Mozagon Dock Shipbuilders Ltd., and Bharat Dynamics Ltd., which operate with strong order books and impeccable government support. Conduct your own research to invest in such stocks or use stock advisory platforms like Univest. Start now with five free trades.  

FAQs

What are the best defence stocks in India?

Ans. Here is the list of top defence stocks in India to buy in 2024. 

Is it good to buy aerospace and defence stocks now?

Ans. With extensive government support and impeccable growth opportunities in 2025, investing in defence stocks in India could be best to increase the investors’ wealth. Analysts are giving buy ratings on aerospace and defence stocks in India, such as Hindustan Aeronautics Ltd., Bharat Electronics Ltd., and BEML Ltd. 

What factors should be considered when investing in defence stocks?

Ans. Before investing in aerospace and defence stocks in India, consider geopolitical risks, the company’s fundamentals, cash flow position, budget allocations, and government initiatives. Considering such factors might help you eliminate the risks of investing in the stock market. 

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