India has emerged as one of the fastest-growing defence markets globally, driven by rising geopolitical tensions and a strong policy push for self-reliance. The country has steadily increased its defence spending from Rs 2.53 lakh crore in FY 2013-14 to Rs 6.81 lakh crore in FY 2024-25, underscoring the government’s focus on modernisation and indigenous manufacturing.
Defence exports have grown remarkably from just Rs 686 crore in FY 2013-14 to a record Rs 23,622 crore in FY 2024–25, marking a 34-fold increase over the past decade. From FY 2014-15 to FY 2024-25. The Indian government is aiming for an export target of Rs 50,000 crore by 2029.
Operation Sindoor as a Key Catalyst for Defence Stocks
In the aftermath of Operation Sindoor, Indian-made weapon systems have proven their mettle with remarkable success. This triumph was swiftly reflected in the stock markets, where major defence counters witnessed a powerful rally. The sector regained centre stage as India’s indigenously developed defence systems earned global acclaim for their precision, reliability and technological sophistication.
Mirroring this renewed optimism, the Nifty India Defence Index surged from a low of 6,816 on May 9, 2025, to an all-time high of 9,195 by June 6 - a spectacular rise of nearly 34 per cent in less than a month.
Adding to the momentum, India’s defence budget for FY2025-26 has been pegged at Rs 6,81,210 crore, marking a 9.5 per cent increase over the previous year. The allocation represents 1.9 per cent of the GDP and accounts for 13.45 per cent of the Union Budget-he highest share among all ministries. Notably, around Rs 1,80,000 crore (26.4 per cent) has been earmarked for capital outlay on defence services, directed toward modernisation, indigenisation and acquisition of advanced weapon systems.
The government’s unwavering focus on ‘Make in India’ and ‘Atmanirbhar Bharat’ continues to strengthen domestic defence manufacturing, positioning India not only as a self-reliant nation in defence production but also as a potential global exporter of next-generation military technology.
India’s Defence Boom: Key Developments and Major Orders
The momentum in defence procurement has accelerated significantly in recent weeks, providing a strong tailwind for domestic manufacturers.
HAL's Landmark Tejas Deal: In the last week of September 2025, Hindustan Aeronautics Limited (HAL) secured a massive Rs 62,370 crore contract from the Ministry of Defence to supply 97 Tejas Mk-1A fighter jets for the Indian Air Force, comprising 68 fighters and 29 twin-seaters, along with associated equipment. This represents one of the largest defence deals in India's history. The delivery of these aircraft is scheduled to commence during 2027-28 and will be completed over six years.
Defence Acquisition Council's Rs 79,000 Crore Approval: On October 23, 2025, the Defence Acquisition Council (DAC), chaired by Raksha Mantri Rajnath Singh, approved capital acquisition proposals worth approximately Rs 79,000 crore. These proposals span across the Indian Army, Navy and Air Force, significantly enhancing their operational capabilities.
Key acquisitions include:
For the Indian Army: Nag Missile System (Tracked) Mk-II (NAMIS), designed to neutralise enemy combat vehicles and bunkers, Ground-Based Mobile ELINT System (GBMES) for electronic intelligence and High Mobility Vehicles (HMVs) equipped with material handling cranes to improve logistics across difficult terrains.
For the Navy: Landing Platform Docks (LPDs) capable of amphibious operations, 30mm Naval Surface Guns (NSG), Advanced Lightweight Torpedoes (ALWT) developed indigenously to target submarines, Electro Optical Infra-Red Search and Track Systems and smart ammunition for rapid gun mounts, all aimed at strengthening maritime and anti-submarine warfare capabilities. Mazagon Dock Shipbuilders, Garden Reach Shipbuilders & Engineers (GRSE), Cochin Shipyard and Larsen & Toubro (L&T) are expected to benefit from Landing Platform Dock (LPD) orders valued at up to Rs 60,000 crore.
For the Air Force: Collaborative Long Range Target Saturation/Destruction System (CLRTS/DS) with autonomous navigation and payload delivery capabilities, enhancing long-range strike efficiency, along with additional operational equipment.
Comparing India’s Defence Giants: HAL, BEL and BDL
Particulars | Hindustan Aeronautics Ltd (HAL) | ||
Business Profile | Manufactures aircraft and helicopters; provides repair & maintenance services for the Indian armed forces and select international clients. | Manufactures radars, communication systems, electronic warfare equipment and avionics for defence and limited civilian markets. | Manufactures guided missiles, surface-to-air and anti-tank missiles, underwater weapons and launchers. |
Market Capitalisation | Rs 3,21,000 crore | Rs 3,08,000 crore | Rs 56,500 crore |
Order Book | Rs 1,89,300 crore (April 2025) | Rs 74,859 crore (July 2025) | Rs 22,700 crore (April 2025) |
Capital Expenditure | Rs 14,000 - Rs 15,000 crore planned over the next five years. | Rs 1,000+ crore for FY26 | - |
ROCE | 33.90% | 38.90% | 19.70% |
ROE | 26.10% | 29.20% | 14.40% |
Sales Growth (3 Years) | 7.96% | 15.60% | 5.89% |
Profit Variation (3 Years) | 18.10% | 30.40% | 1.65% |
Stock P/E | 38.8 | 56.1 | 101 |
3-Year Median P/E | 32.3 | 41.7 | 70.5 |
PEG Ratio | 2.15 | 1.85 | 61.1 |
Piotroski Score | 7 | 8 | 5 |
Key Strengths | Massive order book and strong Tejas contract provide multi-year visibility. Excellent capital utilisation and profitability. | Superior ROCE and ROE; diversified Service base across electronics and communication systems. | Strategic niche in missile systems; key player in India’s indigenous missile development programs. |
Conclusion
India’s rising defence capex and push for indigenisation signal a long-term growth cycle for domestic manufacturers. With strong order books and policy tailwinds, HAL, BEL and BDL are well-positioned to benefit from the country’s modernisation drive.
Comparing India’s Defence Stocks: HAL vs BEL vs BDL – Who Could Perform Better?