Top Defence Stocks in India: Best Dividend-Paying Shares
Defence is crucial for protecting a country from internal and external threats, making it an essential institution. As a developing economy, India is focused on upgrading its defence capabilities to become self-sufficient and modern. With the world’s second-largest army, India has the robust defence capability to protect its borders and citizens. The Indian defence sector covers a wide range of areas, including aerospace, land, and naval systems, with numerous public and private companies contributing to manufacturing defence equipment and supplies. This article will explore the defence stocks list with prices, provide an overview of best defence sector stocks in India and explain how to invest in them.
List of the Top Defence Stocks in India (2024)
Here’s a detailed defence stocks list with price, market capitalisation, and key financials of the top 9 defence stocks in India:
| symbol | Company | ticker | slug | Sector | Market Price | 52W High | 52W Low | Market Cap (Cr.) | PE Ratio | Industry PE | PB Ratio | Div. Yield (%) | ROE (%) | 1YReturns | 3YReturns | 5YReturns | Market Cap Label | Industry Group | Industry | Sub Industry | percentageChange |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| BARA | Bharat Dynamics Ltd | BDL | /stocks/bharat-dynamics-BARA | Aerospace & Defense Equipments | 1,199.95 | 1,794.70 | 776.05 | 43,578.78 | 71.12 | 49.10 | 11.98 | 0.44 | 17.89 | 40.15 | 501.55 | 703.18 | Midcap | Capital Goods | Machinery | Aerospace & Defense | -7.66 |
| DATAP | Data Patterns (India) Ltd | DATAPATTNS | /stocks/data-patterns-india-DATAP | Aerospace & Defense Equipments | 2,512.60 | 3,655.00 | 1,751.00 | 13,903.34 | 76.52 | 49.10 | 10.50 | 0.26 | 14.59 | 35.00 | 222.83 | 232.79 | Smallcap | Capital Goods | Machinery | Aerospace & Defense | -3.77 |
| HIAE | Hindustan Aeronautics Ltd | HAL | /stocks/hindustan-aeronautics-HIAE | Aerospace & Defense Equipments | 4,233.35 | 5,674.75 | 2,748.45 | 282,838.32 | 37.11 | 49.10 | 9.71 | 0.83 | 28.91 | 50.98 | 589.27 | 1,058.95 | Largecap | Capital Goods | Machinery | Aerospace & Defense | -3.60 |
| HIGH | High Energy Batteries (India) Ltd | HIGHENE | /stocks/high-energy-batteries-india-HIGH | Aerospace & Defense Equipments | 609.45 | 1,058.80 | 516.90 | 555.04 | 32.35 | 49.10 | 6.33 | 0.48 | 21.29 | 8.73 | 53.15 | 1,172.34 | Smallcap | Capital Goods | Machinery | Aerospace & Defense | 0.43 |
| IDE | ideaForge Technology Ltd | IDEAFORGE | /stocks/ideaforge-technology-IDE | Aerospace & Defense Equipments | 589.15 | 886.00 | 535.00 | 2,484.53 | 54.87 | 49.10 | 3.76 | 0.00 | 9.19 | -29.03 | -54.50 | -54.50 | Smallcap | Capital Goods | Machinery | Aerospace & Defense | -1.43 |
| PARAS | Paras Defence and Space Technologies Ltd | PARAS | /stocks/paras-defence-and-space-technologies-PARAS | Aerospace & Defense Equipments | 1,016.10 | 1,592.70 | 610.00 | 3,991.69 | 124.51 | 49.10 | 9.01 | 0.00 | 7.48 | 41.34 | 36.85 | 106.34 | Smallcap | Capital Goods | Machinery | Aerospace & Defense | -1.74 |
| SIKA | Sika Interplant Systems Ltd | SIKA | /stocks/sika-interplant-systems-SIKA | Aerospace & Defense Equipments | 2,503.70 | 3,548.00 | 1,116.90 | 1,057.73 | 54.63 | 49.10 | 10.23 | 0.40 | 20.47 | 74.72 | 144.37 | 1,272.27 | Smallcap | Capital Goods | Machinery | Aerospace & Defense | 4.34 |
| TANE | Taneja Aerospace and Aviation Ltd | TANAA | /stocks/taneja-aerospace-and-aviation-TANE | Aerospace & Defense Equipments | 417.15 | 710.00 | 309.00 | 1,086.83 | 97.65 | 49.10 | 8.33 | 0.94 | 9.28 | 19.19 | 243.62 | 1,817.93 | Smallcap | Capital Goods | Machinery | Aerospace & Defense | 0.68 |
| TECHE | TechEra Engineering (India) Ltd | TECHERA | /stocks/techera-engineering-india-TECHE | Aerospace & Defense Equipments | 200.90 | 236.10 | 125.00 | 338.68 | 69.97 | 49.10 | 21.30 | 0.00 | 35.88 | 53.07 | 53.07 | 53.07 | Smallcap | Capital Goods | Machinery | Aerospace & Defense | -1.99 |
Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.
Note: This list of defence stocks was generated on 15th October, 2024 and is subject to real time updates. This data is derived from Tickertape Stock Screener.
🚀 Pro Tip: You can use Tickertape’s Stock Screener to research and evaluate stocks with over 200+ filters and parameters.
Top 5 Defence Stocks in India: An Overview
Here are brief overviews of the top listed defence companies in India listed above:
Hindustan Aeronautics Ltd
One of the leading defence companies in India, Hindustan Aeronautics Limited (HAL) is an Indian public-sector aerospace and defence company. Established on 23rd December 1940, it is one of the world’s oldest and largest manufacturers.
Among the top 10 defence stocks in India, this Indian defence stock is a technology-focused company listed on the Stock Exchange. It specialises in the aerospace and defence sector and offers engineering, manufacturing solutions, project and systems integration, MRO, and distribution services.
Bharat Dynamics Ltd
Bharat Dynamics Limited (BDL), established in Hyderabad in 1970, is one of India’s key manufacturers of ammunition and missile systems. Initially, BDL developed in-house R&D capabilities, focusing on design and engineering activities while continuing to manufacture weapon systems.
Taneja Aerospace and Aviation Ltd
One of the most prominent defence companies in India, Taneja Aerospace and Aviation Ltd (TAAL) manufactures and supplies aerostructure composite parts, structures, and assemblies. TAAL also designs and builds airfield infrastructure..
Paras Defence and Space Technologies Ltd
Specialising in aerospace structures and assemblies, this company’s share performance makes it one of the top 10 defence stocks in India to watch. Paras Defence And Space Technologies Ltd. leads in the defence and space technology sector, focusing on innovative solutions and advanced technologies for defence, aerospace, and space exploration.
Confused About Which Defence Stocks to Pick? Consider these smallcases.
1. Quantance Defence Stars smallcase: This smallcase, managed by Quantance Research, is a concentrated treasure basket of 3-15 stocks selected from NIFTY Defence Universe.
2. smartvalues – defense smallcase: This smallcase, managed by Lamron Analysts, is a portfolio of five stocks from the defence sector.
- Disclosure for the Quantace Defence Stars smallcase.
- Disclosure for the smartvalues-defense smallcase.
However, if you’re confused about which stocks to pick, you can explore smallcases:
- smallcases are readymade portfolios of stocks/ETFs, that are based on a theme idea or strategy
- They’re created and managed by SEBI-registered experts
- smallcase.com offers over 500+ stock portfolios, created by 180+ managers
- Some of the popular smallcases among new investors are as follows:
Disclosures for aforementioned smallcases
What are Defence Stocks in India?
Defence stocks are shares in defence sector companies in India that produce, develop, and distribute military equipment, technology, and services. Investing in India defence sector stocks list allows investors to engage in industries essential for national security.
Indian Defence Sector – Overview
India ranks fourth globally in defence spending, with a budget of approximately $74.7 billion. Defence exports for the financial year 2023-1024 reached Rs. 21,083 cr. (about $2.63 billion), a 32.5% increase from the previous year.
- Government Initiatives: The Atmanirbhar Bharat initiative has boosted indigenous manufacturing, contributing to a defence production value of over $15 billion in 2023- 2024.
- Budget Allocation: The Union Budget for 2024-25 allocates Rs. 6.22 lakh crore for defence, with capital spending rising by 9.4% to Rs. 1.72 lakh crore.
- Market Performance: The Nifty India Defence index surged 142% over the past year as of late October 2024, indicating strong investor confidence.
India aims for a turnover of $26 billion in aerospace and defence manufacturing by 2025, supported by infrastructure developments and public-private partnerships.
How to Invest in the Best Defence Stocks in India?
Research and analysis are crucial to investing in the best defence stocks in India. Identify key players through the defence stocks list with price and understand government policies, which can impact the growth of Indian defence companies. Monitoring investments and keeping track of the defence shares list in India will help in making informed decisions.
Investors can choose India defence stocks, ETFs or mutual funds to invest in the defence industry. To identify the best defence sector stocks list in India, consider the following steps:
- Research and analysis: Investors should conduct thorough research and analysis of the top defence stocks India, market conditions, and the government’s defence policies and initiatives that can impact the Indian best defence share growth.
- Selecting the right stocks: Investors can use stock screeners to identify defence stocks share price and potential investment opportunities in the defence sector. For example, investors can utilise the Tickertape Stocks Screener to find a defence share list: select ‘Aerospace and Defence Equipments’ under ‘Sector’ and sort the stock according to preferred parameters like market cap, 5-Yr CAGR, net profit, return on equity, etc.
- Monitoring investments: It is essential to monitor the government’s defence policies and initiatives, which can impact the growth of defence shares, and exit the investment when necessary.
Implications of the Union Budget 2024-2025 on the Defence Sector
Finance Minister Nirmala Sitharaman announced an allocation of Rs. 4.54 lakh cr. for the defence segment in the Union Budget 2024, reducing it from the Rs. 6.21 lakh cr. allocated in the Interim Budget.
Total Defence Budget
The total allocation for the Ministry of Defence budget is Rs. 6.22 lakh cr., which includes Rs. 1.41 lakh cr. for defence pensions. This represents a 4.79% increase from the previous fiscal’s allocation of Rs. 5.94 lakh cr. The defence budget accounts for approximately 12.9% of the total budget outlay for 2024-25.
Comparison to Previous Budgets
The defence budget has seen a 44% increase from the 2019-20 fiscal year. Additionally, it has increased by 171% from the Rs. 2.29 lakh crore allocated in the 2014-15 fiscal year.
Modernisation Budget
The budget for military modernisation stands at Rs. 1.72 lakh cr., which is a 6% increase from the Rs. 1.62 lakh cr. allocated in the previous fiscal year.
Budgetary Norms
Unlike previous years, the individual capital budgetary allocations for the Army, Navy, and Air Force were not made public. This change aims to foster jointness among the services by consolidating their demands into similar expenditure categories.
Capital Budget
The limited hike in the capital budget is attributed to fewer new contracts signed by the Armed Forces and slippages in scheduled payments and deliveries. The revised estimates for the capital budget in 2023-24 were Rs. 1.57 lakh cr., which is lower than the allocated Rs. 1.62 lakh cr.
Revenue Budget
The overall revenue budget for defence is Rs. 2.82 lakh cr. This includes pay and allowances for the Armed Forces, as well as allocations for fuel, ammunition, and maintenance of assets. The revenue expenditure, excluding salary, stands at Rs. 92,088 cr. Additionally, over Rs. 6,000 cr. has been allocated towards the Agnipath scheme.
Innovation and Development
An additional allocation of Rs. 400 cr. has been made for the ADITI scheme, which engages start-ups and MSMEs to develop innovative defence technologies for the Indian military.
Projects and Procurement
The budget will fund the modernisation of the Su-30 fleet, the procurement of additional aircraft, advanced engines for existing MiG-29s, transport aircraft C-295, and missile systems. Navy projects, such as the acquisition of deck-based fighter aircraft, submarines, and next-generation survey vessels, will also be supported.
Border Infrastructure
The Border Roads Organisation’s budget has been increased by 30% to Rs. 6,500 cr. This will fund projects like the development of Nyoma Airfield in Ladakh, permanent bridge connectivity in the Andaman and Nicobar Islands, the Shinku La tunnel in Himachal Pradesh, and the Nechiphu tunnel in Arunachal Pradesh.
Indian Coast Guard
The allocation for the Indian Coast Guard is Rs. 7,651.8 cr., which is a 6.31% increase from the previous fiscal year. Of this, Rs. 3,500 cr. will be spent on capital expenditures, including the acquisition of fast-moving patrolling vehicles, advanced electronic surveillance systems, and weapons.
Ex-Servicemen Welfare Scheme
The total allocation for the Ex-Servicemen Welfare Scheme is Rs. 6,968 cr., representing a 28% increase from the previous fiscal year.
Defence Research and Development Organisation
The budget for the Defence Research and Development Organisation has been increased to Rs. 23,855 cr. from Rs. 23,263.89 cr. in the previous fiscal year.
Key Features of Indian Defence Sector Stocks
The key features of Indian defence stocks are as follows:
Government Backing and Policy Support
Defence companies in India, including defence private companies in India, benefit significantly from government policies like “Make in India” and relaxed FDI norms allowing up to 74% via the automatic route. These initiatives boost investments and enhance self-reliance in defence sector manufacturing.
High Entry Barriers
The defence sector stocks India face high entry barriers due to strict regulations and heavy capital investment requirements. Companies must meet national security standards and invest in costly machinery and R&D, limiting new entrants.
Partnerships and Joint Ventures
Strategic alliances with global firms enable defence companies listed in India to integrate advanced technologies. Government-backed PPPs and collaborations with DRDO enhance innovation and strengthen the defence sector.
Research and Development Intensity
Indian defence sector stocks focus heavily on R&D, supported by government grants to develop indigenous technologies. This reduces import dependency and strengthens the defensive stocks India portfolio.
Cyclical and Long-term Contracts
Contracts in the defence sector are long-term and cyclical, ensuring stable revenue streams. Multi-year agreements provide predictable demand, aiding in investment planning for defence companies in India.
Export Potential
India’s defence companies listed in NSE are expanding globally under the government’s Defence Export Strategy. This boosts defence share price growth and positions Indian products competitively on the global stage.
Risk Factors
Defensive stocks in India face risks from geopolitical shifts and budget constraints. These factors can affect demand for aerospace stocks India and funding for defence projects, impacting stock performance.
Stock Volatility and Performance
The performance of defence shares India depends on government spending, geopolitical tensions, and policy changes. Volatility in the defensive stocks list requires investors to track fiscal policies and global defence trends.
Why Invest in the Top 10 Defence Stocks in India?
Investing in defence shares India offers stability due to consistent demand, government backing, and long-term contracts. The government’s push for indigenous manufacturing under initiatives like “Make in India” is expected to drive growth in defence sector stocks India. Monitoring the defence stock list and defence share price list can help investors identify opportunities among the best defence stocks in India 2024.
Investors should analyse defence companies listed in India for their financial performance, growth potential, and alignment with government policies. Researching defence PSU stocks in India and defence private companies in India is crucial to make informed investment decisions. Following trends in India defence share price ensures a better understanding of the sector’s growth trajectory.
How to Select the Best Defence Stocks in India?
Tracking the defence stocks share price is crucial for investors who want to capitalize on short-term fluctuations or hold for long-term growth. Investors need to consider the following aspects and conduct further research by consulting financial advisors to select the best defence stock in India for their portfolio:
- Financial Performance: Analysing the financial performance of defence companies in India is crucial. Key metrics such as revenue growth, profitability, and debt levels provide insights into a company’s financial health and its ability to deliver returns. These factors are especially important when evaluating defence company share price trends and overall viability within the defence sector.
- Technological Advancements: In the highly competitive defence sector, technological innovation is a critical driver of success. Companies at the forefront of research and development are more likely to maintain a competitive edge. Investors considering defence ETF India or the best defensive stocks in India should monitor firms prioritising innovation and staying ahead in cutting-edge technologies.
- Government Contracts: The defence industry is heavily influenced by government policies and contracts. Regularly tracking changes in regulations and the awarding of contracts to specific companies in defence sector helps investors assess growth opportunities. Companies listed in the defence company listed in NSE often benefit from long-term agreements, offering stability in stock performance.
Risks Associated With Investing in Defence Stocks in India
Here are a few risks that may be associated with investing in defence stocks in India:
- Dependence on Government Budgets: Defence spending fluctuates with political and economic changes, affecting company performance.
- Ethical Considerations: Some investors may be concerned about supporting the military-industrial complex.
- Cyclical Performance: Defence stocks can underperform during long periods of peace due to shifting government spending priorities.
Future of Defence Stocks and Defence Industry in India
The best defence stocks in India are poised to benefit from increased military spending and the expansion of the defence company in the Indian export market. By 2025, the Ministry of Defence aims for a $26 bn turnover in aerospace and defence manufacturing, including $5 bn in exports.
Several parameters contribute to the positive outlook for defence related stocks in India:
Domestic demand
The demand for defence equipment and services within India is expected to remain robust, driven by factors such as changing geopolitical scenarios. For instance, the increasing regional tensions have led to a higher demand for defence equipment. Other factors driving the demand include the need to replace obsolete equipment, internal security requirements, economic growth, and the entry of new defence companies in Indian stock market.
Government support
The Indian government is pivotal in promoting self-reliance and indigenous production in the defence sector. For instance, it has launched the ‘Make in India’ initiative, which encourages domestic production of defence equipment, and the ‘Defence Procurement Procedure 2020 ‘, which prioritises indigenous suppliers. This proactive stance is expected to significantly benefit domestic defence listed companies in India, providing a stable and conducive environment for investment.
Export potential
India’s attractive position in the global defence market presents a significant opportunity. With its potential to become a major exporter of defence equipment and services, particularly in engineering services and component sourcing, the industry’s growth prospects are promising, fostering optimism among potential investors.
While Indian defence sector stocks in India present a secure investment choice, investors must conduct thorough research and analysis. Understanding each individual defence stocks in the defence shares list in India and their growth potential is key to making informed investment decisions, ensuring investors feel prepared and confident in their choices.
Factors to Consider While Investing in the Best Defence Stocks in India
When venturing into investments within India’s defence sector, several crucial factors warrant careful consideration.
- Technological Advancements: With technological advancements, the defence company stocks in India are rapidly modernising. Investors should focus on defence company stocks that invest in research and development.
- Geopolitical Risks: Defence related stocks India are susceptible to geopolitical risks, and investors should be aware of such risks while investing in Indian defence manufacturing stocks. Factors such as border tensions, conflicts, and government policy changes can significantly impact India’s defence stocks NSE.
- Government Policies and Regulations: The Indian government plays a significant role in the defence industries and significantly impacts defence stocks in India. Investors should closely monitor government policies and regulations related to defence procurement, licensing, and foreign direct investment (FDI).
- Defence Budget: The defence budget is a critical factor that investors in defence stocks in India should consider when selecting the top stocks in the defence sector. Thus, the Indian government has been increasing the defence export budget yearly.
To Wrap It Up…
The Indian defence industry is critical in strengthening the country’s national security and promoting self-reliance in defence production. India boasts the world’s second-largest standing army. However, it also faces a volatile geopolitical climate, necessitating strong defence capabilities to safeguard its borders and citizens. Investors can also explore smallcases that invest in defence stock portfolios. For example, the Quantance Defence Stars smallcase, managed by Quantance Research.
Frequently Asked Questions on Defence Stocks in India
Here is a defence shares list in India of the top 5 defence stocks based on their 1-year returns:
– Sika Interplant Systems Ltd
– Hindustan Aeronautics Ltd
– Bharat Dynamics Ltd
– Taneja Aerospace and Aviation Ltd
– Paras Defence and Space Technologies Ltd
Note: This data on this list of the top 5 defence stocks in India was generated on 22nd November 2024.
You can invest in defence stocks in India with these 4 simple steps:
1. Open a trading account with smallcase.
2. Research India top defence companies and select the ones you want to invest in.
3. Place a buy order for the shares of the selected top defence companies in India.
4. Monitor your investments and sell the defence shares in India when you are ready to exit.
To invest in stocks effectively, one must carefully analyse financial data to determine a company’s true value. For listed defence manufacturing companies in India, evaluating financial performance involves analysing revenue, profit margins, and debt levels. Strong financial indicators can suggest stability and present potential investment opportunities.
The Indian government has been increasing its spending to strengthen the country’s defence in recent years. This has potentially led to increased demand for defence equipment and services, which has benefited defence companies, including Indian private defence companies as well. Investors should comprehend the growth potential and challenges defence sector companies confront before investing.
Many Indian defence companies listed in NSE provide returns to their owners. However, the dividend payment ratio can vary depending on the company’s financial performance, growth objectives, and capital expenditure needs.
No. Currently, none of the penny stocks in India are operating in the defence sector.
Here are the top 3 defence sector stocks sorted on their market cap:
1. Hindustan Aeronautics Ltd (Rs. 2,66,403.18 cr.)
2. Bharat Dynamics Ltd (Rs. 33,976.68 cr.)
3. Data Patterns (India) Ltd (Rs. 12,870.99 cr.)
Note: The data on this list has been taken on 22nd November 2024.
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