Best Defence Stocks In India In April 2025: HAL, Bharat Dynamics and More- Based on 5-Year CAGR

According to the Global Power Index, India ranks fourth in military strength with a firepower score of 0.0979, where a score of 0.0 represents perfect capability. The Indian government has set a defence production target of US$ 25 billion by 2025, with US$ 5 billion expected from exports.

As one of the world’s largest defence spenders, India allocated US$ 74.8 billion (₹6.21 lakh crore) for defence in its budget, making up 13.04% of the total budget. This represents a 4.72% increase from the 2023-24 budget and an 18.35% rise from 2022-23. In 2022, India’s military expenditure stood at US$ 81.4 billion, ranking fourth globally, with a 6% increase from the previous year.

For FY 2023-24, India’s defence production was valued at ₹1,27,265 crore (US$ 15.37 billion), with public sector undertakings (PSUs) contributing ₹74,434 crore (US$ 8.99 billion).

This article explores the top defence stocks in India for April 2025, selected based on their best 5-year CAGR performance.

Best Defence Stocks in April 2025- Based on 5-Year CAGR

Note: The best defence stocks in April, 2025 here is as of April 02, 2025. The stocks are sorted based on the 5Y CAGR. 

Overview of the Defence Stocks in India

1. Nibe Ltd

Founded in 2005, Nibe Ltd focuses on manufacturing critical components for the defence sector, EVs, and software development. The company specialises in fabricating and machining parts for the defence industry, assembling EV components, and driving innovation through its EV division and the BVM R&D Foundation.

In the December 2024 quarter, Nibe Ltd recorded a revenue of ₹138.88 crore and a net profit of ₹2.82 crore, compared to ₹127.22 crore in revenue and ₹9.40 crore in net profit in the September 2024 quarter.

Key metrics:

• Earning per Share (EPS): ₹22.57
• Return On Equity (ROE): 14.92%

2. Sika Interplant Systems Ltd

Sika Interplant Systems Ltd is an engineering-focused company serving India’s Aerospace, Defence, Space, and Automotive sectors. Its key operations include engineered projects and systems, interconnect solutions, electrical module integration, MRO (maintenance, repair, and overhaul) services, and value-added distribution.

In the December 2024 quarter, the company reported a revenue of ₹37.98 crore and a net profit of ₹6.63 crore, reflecting growth from the September 2024 quarter, where revenue was ₹33.24 crore and net profit stood at ₹6.03 crore.

Key metrics:

• EPS: ₹56.73
• ROE: 21.87%

3. Hindustan Aeronautics

Hindustan Aeronautics specialises in manufacturing aircraft and helicopters, along with providing repair and maintenance services. By FY24, its order book expanded to ₹94,000 crore, up from ₹82,000 crore in FY22, with substantial new orders expected in FY25.

For the December 2024 quarter, the company reported a revenue of ₹6,956.93 crore and a net profit of ₹1,432.60 crore. This compares to ₹5,976.55 crore in revenue and ₹1,490.36 crore in net profit in the September 2024 quarter.

Key metrics:

• EPS: ₹129.35
• ROE: 27.83%

4. Bharat Dynamics Limited

Bharat Dynamics Limited (BDL), a government enterprise in India, specialises in manufacturing guided missiles and defence equipment. The company supplies guided missiles, underwater weapons, and airborne defence systems to the Indian Armed Forces.

In the December 2024 quarter, BDL reported a revenue of ₹832.14 crore and a net profit of ₹147.13 crore, reflecting growth from the September 2024 quarter, where revenue was ₹544.77 crore and net profit stood at ₹122.53 crore.

Key metrics:

• EPS: ₹15.43
• ROE: 15.16%

Best Defence Stocks in April 2025- Based on Market Cap

Note: The best defence stocks in April, 2025 here is as of April 02, 2025. The stocks are sorted based on the market cap. 

Best Defence Stocks in April 2025- Based on Net Profit Margin

Note: The best defence stocks list in April, 2025 here is as of April 02, 2025. The stocks are sorted based on the net profit margin. 

Key Factors to Consider Before Investing in Defence Stocks

• Technological Advancements

India’s defence industry is rapidly evolving with cutting-edge technologies. Investors should focus on companies that prioritize research and development (R&D) to maintain a competitive edge.

• Influence of Geopolitical Risks

Defence stocks are highly sensitive to global events, including border disputes, conflicts, and policy changes. These factors can significantly impact the sector’s stability and profitability.

• Government Policies and Regulations

The defence sector is strictly regulated, with policies governing procurement, licensing, and foreign direct investment (FDI). Investors should evaluate how these regulations affect a company’s growth prospects.

• Increasing Defence Budget

India’s rising defence expenditure presents significant growth opportunities. Companies that align with government investments in equipment, technology, and exports stand to benefit.

Tips for Investing in Defence Stocks

• Understand the Sector: Stay informed about government policies, budget allocations, and technological advancements.

• Assess Financial Strength: Choose companies with strong balance sheets, stable earnings, and consistent growth.

• Monitor Global Trends: Geopolitical events and defence industry developments can influence stock performance.

• Seek Professional Guidance: Consulting a financial expert can help align investments with risk appetite and financial goals.

Risks of Investing in Defence Stocks

• Geopolitical Uncertainty: Global tensions and conflicts can cause stock price fluctuations.

• Policy Changes: Shifts in government priorities may impact future growth.

• Regulatory Challenges: Compliance with stringent regulations can affect operations and profitability.

• Reliance on Government Contracts: Defence companies often depend on large contracts, making them vulnerable to delays or cancellations.

Future Prospects of India’s Defence Sector

• Government Backing: Plans to invest ₹6 lakh crore in the sector will fuel expansion.

• Technological Progress: Innovations in AI, drones, and advanced weaponry will boost competitiveness.

• Global Partnerships: Increased FDI and collaborations with international firms are strengthening the sector.

• Export Growth: India’s growing presence in the global defence market offers long-term potential for domestic manufacturers.

Conclusion

Investing in defence stocks requires a thorough analysis of financial stability, growth potential, and associated risks. A well-informed approach, backed by expert guidance, can help investors navigate this dynamic industry effectively.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.