The private sector contributes a lot to the defence industry by manufacturing portions of components, sub-systems, and spares.
The industry was exposed to private involvement in 2001. Currently, there are over 430 licensed companies, some of which are the best private defence stocks in India. The private sector has aided the development of crucial platforms like the Main Battle Tank Arjun, Dhanush Artillery Gun System and the Advanced Towed Artillery Gun System.
Let us take a look at what the defence industry looks like.
Also read: Fast Growing Companies to Watch in India.
The private defence industry landscape of India
Unfortunately, the lack of stability in India’s neighbourhood has caused an ever-rising demand for defence equipment. ₹1.7 lakh crore was devoted to modernisation and upscaling of the defence capability in the interim union budget of 2024-25. This indicates a rise of 9.4% from the previous year.
The export mix of the country includes an array of modern military equipment.
- Bullet proof jackets
- Dornier aircraft
- Helmets
- Fast interceptor boats
- Lightweight torpedoes
- Chetak helicopters
A key milestone of India’s military manufacturing prowess is the ‘Made in Bihar’ boots in the Russian army.
Also read: Top Logistics Stocks to Invest in India
Top private defence stocks in India
Let us explore the best private defence stocks in India based on market capitalisation.
Solar Industries India Ltd.
The company is one of the biggest producers of diverse equipment in India. It also tops the list of best private defence stocks in India. The company’s product portfolio includes gadgets like bulk and cartridge explosives, detonators, detonating cords, mining equipment, delivery systems, ammunition filing and pyros fuses.
The company commands 24% of the explosives industry. The Nagpur unit is the biggest single-location cartridge plant. The company provides a comfortable debt protection environment. The company maintains a good liquidity profile.
Zen Technologies Ltd.
The business was incorporated in 1993. The company produces combat training solutions and counter-drone commodities. The company has offices abroad, like UAE and USA.
The corporation has the benefit of a strong footing in the design, development and supply of training equipment. The company maintains a dynamic R&D team. The strong capital structure of the company has reduced its dependence on outside funds.
The revenue is generated primarily through tender-based projects. This makes the nature of business volatile. However, the corporation reaps the benefit of a strong liquidity footing.
Data Patterns (India) Ltd.
Data Patterns Ltd. is the most dynamic company in the sector. The company focuses primarily on indigenous production equipment and gadgets. With more than thirty-five years of technical know-how, the company produces products across many segments like space, air, land and sea.
The company holds steady revenue and comfortable operating margins. The order intake is forecasted to grow by 45% to 50% in FY25. The corporation continued a brawny liquidity position and is less dependent on external sources of funds. The pending order record provides an approximate idea of its medium-term revenue position. There is a 17% increase in the year-on-year pending order book position.
Astra Microwave Products Ltd.
The company manufactures sub-systems for microwave systems as well as radio frequency. These technologies are used in industries like Defence, Space, Meteorology and Telecommunication.
The revenue is expected to grow by 15%. The company’s resilient dependence on its prowess saves it from fluctuations in the business environment. Orders worth ₹ 2,099 crores are in line to be carried out over the upcoming twenty-four months. This provides a strong view of the future to its investors.
The corporation is presently undergoing a working capital crunch due to a long gestation period. There is usually a good time lapse between delivery and payment. The liquidity position can thus be identified as adequate and not strong.
MTAR Technologies Ltd.
MTAR develops and manufactures components and equipment for the defence, aerospace, nuclear and clean energy sectors.
The goal of the company was to aid the technical aspirations of India. The company owns an export facility as well.
The company produces unique products. Some of them are listed below.
- Water Lubricated Bearings
- Ball Screws
- Electro-Mechanical Actuation Systems
- Roller Screws
- ASP assemblies
Stock comparisons
The table below contains the list of top private defence stocks in India based on market capitalisation.
| Name | P/E | Market cap (₹ Cr.) | Div Yield (%) | NP Qtr.(₹ Cr.) | Qtr. Profit var (%) | Sales Qtr. (₹ Cr.) | Qtr. Sales Var. (%) | ROCE (%) |
| Solar Industries | 91.19 | 92158.73 | 0.09 | 303.78 | 42.84 | 1715.83 | 27.34 | 32.47 |
| Zen Technologies | 80.89 | 16392.20 | 0.06 | 63.44 | 359.46 | 241.84 | 263.67 | 45.97 |
| Data pattern | 72.04 | 13335.62 | 0.27 | 30.28 | -10.39 | 91.02 | -15.96 | 19.71 |
| Astra Microwave | 55.70 | 7260.47 | 0.25 | 25.39 | -15.42 | 229.61 | 20.77 | 18.77 |
| MTAR technologies | 141.39 | 5505.94 | 0.00 | 18.78 | -9.84 | 190.18 | 14.07 | 11.38 |
Bottomline
The defence sector of the company is witnessing a huge influx of government support and aid. Since the sector is closely tied to national security it enjoys a certain privilege and safety. Investment in private defence stocks in India can lead to the sustained growth of the portfolio. However, it is important to keep in mind that the long gestation period and tender-related nature of the industry require patient investment.
Also read: Top Construction Stocks to Invest in India.
FAQs
Which defence stock is the best in India?
The defence sector enjoys strong government support and aid because it is closely related to national security. The companies are mostly government-owned and include companies like Hindustan Aeronautics Ltd., Bharat Electronics Ltd, Bharat Dynamics Ltd., etc.
There are many top private defence stocks in India.
- Solar Industries India Ltd.
- Zen Technologies Ltd.
- Data Patterns India Ltd.
- Astra Microwave Products Ltd.
- MTAR Technologies Ltd.
Are there any private defence companies in India?
There are approximately 430 licensed companies. Around 16000 MSMEs operate in this industry. Approximately 45% of upcoming defence orders are estimated to go to the private players.
The top private defence stocks in India are.
- Solar Industries India Ltd.
- Zen Technologies Ltd.
- Data Patterns India Ltd.
- Astra Microwave Products Ltd.
- MTAR Technologies Ltd.
What is the best defence stock to buy?
The best defence stock in India is Hindustan Aeronautics Ltd. (HAL). The company is involved in the production of aircraft and Helicopters, repair and maintenance.
However, the best private defence stock in India is Solar Industries India Ltd. The company has the largest cartridge plant in Nagpur.
What are the top 3 stocks to buy right now in India?
The Indian capital market is experiencing a strong and sustainable high.
This is a great opportunity for investors to add good stocks to their portfolios and diversify as much as they can.
The industries which are expected to perform well are listed below.
- Healthcare and insurance industry
- Renewable energy sector
- Information technology sector
- Real estate sector
- FMCG
- Automobile sector
How to find the next big stock?
Some points that may help you to understand the next big opportunity in the market are as follows.
- Identify your investor appetite.
- Make a list of industries that are expected to perform well.
- Identify the top performers and underrated players of the industry through detailed research of their business.
- Identify the price movement pattern of the stocks. This will help you identify at what price range you should buy and when you can hold.
