Best Defence Stocks In India in September 2024- 5-year CAGR Basis

India is one of the strongest military powers globally and holds a strategically important position for the Indian government. The Indian defence manufacturing industry is a vital part of the economy and is expected to grow due to increasing national security concerns. The Indian government has set a goal of reaching US$25 billion in defence production by 2025, including US$5 billion from exports. In this article know the best defence stocks in India in September based on 5-year CAGR.

Best Defence Stocks in India in September 2024 – 5-year CAGR Basis

Note: The defence stocks list has been sorted based on 5-year CAGR, and as of August 29, 2024

Overview of Best Indian Defence Sector Stocks

1. Taneja Aerospace & Aviation Ltd

Taneja Aerospace & Aviation Ltd, founded in 1994, is part of the Pune-based Indian Seamless group. The company specialises in manufacturing and selling various parts and components for the aviation industry. It also offers services related to airfield operations, maintenance, repair, and overhaul (MRO), along with other related services.

For the quarter ended March 2024, the company’s revenue increased to ₹8.19 crore from ₹7.45 crore in the preceding quarter. Meanwhile, the net profit increased to ₹2.52 crore from ₹2.50 crore in the previous quarter.

Key metrics: 

• Earning per share (EPS): ₹4.37
• Return on equity (ROE): 8.53%

2. High Energy Batteries (India) Limited

High Energy Batteries (India) Limited, originally known as Simco Meters Ltd, was established as a public limited company in September 1991. The company manufactures batteries at its factory in Mathur, near Trichy. Its products are designed for use by the Indian Army, Navy, and Air Force in launch vehicles and for commercial purposes, such as automotive and standby VRLA applications.

For the quarter ended March 2024, the company’s revenue increased to ₹19.88 crore from ₹16.89 crore in the preceding quarter. Meanwhile, the net profit increased to ₹4.70 crore from ₹3.25 crore in the previous quarter.

Key metrics: 

• EPS: ₹19.14
• ROE: 19.56%

3. Sika Interplant Systems Limited

Sika Interplant Systems Limited, founded in 1985, is an engineering company focused on the Indian aerospace, Defence, and space (A&D) and Automotive sectors. The company operates in four main areas: engineering design and development, manufacturing, assembly, and testing, projects and systems integration, and maintenance, repair, and overhaul (MRO). Most of its business is aimed at these sectors.

For the quarter ended March 2024, the company’s revenue increased to ₹37.16 crore from ₹26.00 crore in the preceding quarter. Meanwhile, the net profit increased to ₹6.10 crore from ₹4.77 crore in the previous quarter.

Key metrics: 

• EPS: ₹45.97
• ROE: 18.85%

4. Hindustan Aeronautics Ltd (HAL) 

Established on December 23, 1940, and headquartered in Bangalore, HAL is owned by the Ministry of Defence, Government of India. The company provides a range of products, including aerospace equipment, helicopters, aircraft, communication and navigation gear, advanced light helicopter weapon systems, light combat helicopters, intermediate jet trainers, aero engines, and accessories for helicopters, aircraft, and aero engines.

For the quarter ended June 2024, the company’s revenue decreased to ₹4,347.57 crore from ₹14,768.78 crore in the preceding quarter. Meanwhile, the net profit decreased to ₹1,435.59 crore from ₹4,292.04 crore in the previous quarter.

Key metrics: 

• EPS: ₹122.86
• ROE: 28.29%

5. Bharat Dynamics Limited (BDL)

Bharat Dynamics Limited (BDL) is a major defence public-sector company in India that manufactures Surface-to-Air Missiles (SAMs), Anti-Tank Guided Missiles (ATGMs), underwater weapons, launchers, Countermeasures Dispensing Systems (CMOS), and test equipment. The company also refurbishes and extends the life of stored and used missiles. BDL is the only manufacturer of SAMs, torpedoes, and ATGMs in India and is currently the exclusive supplier of SAMs and ATGMs to the Indian Armed Forces.

For the quarter ended June 2024, the company’s revenue decreased to ₹191.17 crore from ₹854.12 crore in the preceding quarter. Meanwhile, the net profit decreased to ₹7.22 crore from ₹288.78 crore in the previous quarter.

Key metrics: 

• EPS: ₹15.77
• ROE: 15.90%

Defence Sector Outlook

The Indian government focuses on innovative solutions to enhance the country’s defence and security through the ‘Innovations for Defence Excellence (iDEX)’ initiative. This program offers a platform for start-ups to connect with defence organisations to develop new technologies and products over 5 years (2021-2026). By working with partner incubators, iDEX has successfully engaged the start-up community in the Defence India Start-up Challenge (DISC) programme.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.