Top 10 Defence Companies in India by Market Cap

Defence is an important institution as it helps in protecting the country from threats both inside and outside the country. India, an emerging country, understands the importance of modernizing its defence system to become self-reliant and effective, especially in deterring threats from its neighbours. The Indian military industry has experienced a significant increase in share prices due to investors' strong belief in its potential.

Growing concerns about national security are expected to boost the growth of India's military industry, which is an important component of the country's economy. India has the second largest army in the world, providing it with a formidable defence force to protect its people and borders. And it seems reasonable to make sure that it is taken advantage of as much as possible. India's defence industry covers a wide range of sectors such as navy, land and aerospace systems. The production of defence supplies and equipment is assisted by a wide range of defence enterprises, both public and private.

In recent years, the defense industry has experienced a tremendous change, moving from a major importer to an exporter. India ranked fourth globally in 2022 for defence spending. Defence exports grew by 32.5 percent in the 2023-24 financial year, reaching a record high of Rs 21,083 crore (about $2.63 billion). Compared to exports of Rs 15,920 crore last year, this is a substantial increase. The Indian defence sector has experienced rapid economic expansion in addition to growing demand, government efforts and innovation. Indian defence equities have experienced an incredible upside in Dalal Street over the past 12 months. According to corporate database ACE Equity data, as of April 26, 2024, the Nifty India Defence index had grown by an astounding 142 percent over the previous year.

What are Indian Defence Companies Stocks?

Publicly traded firms listed among the best defence stocks in India are primarily engaged in the manufacture, development, manufacturing, and maintenance of military systems, technologies, and equipment. These companies cater to the requirements of the Indian Armed Forces, which include the Army, Navy, and Air Force, along with other defence-related organisations such as the Defence Research and Development Organisation (DRDO) and the Orders Factories Board.

Apart from catering to the domestic market, some large Indian defence companies have ventured into international markets, providing their products and services to foreign governments and military companies. These businesses operate in a highly regulated environment, and the Indian government is heavily involved in setting up regulation, awarding contracts, and providing funding for development initiatives. Many of these businesses have developed specialized expertise to meet the unique needs of the defence industry and have long-standing relationships with the Indian Armed Forces.

This blog post will take you through the top defence stocks in India in 2024 based on market capitalization and analyst ratings. These stocks have attracted interest from investors due to their bright future.

Top 10 Defence Companies List by Market Capitalisation

Investing in the stock market requires extensive research and analysis. Let's take a closer look at the financial performance of the top 10 Indian defence stocks mentioned earlier, before discussing particular investment methods. Some important financial metrics are compiled in the table below to help you compare these businesses. Using information obtained from NSE India and BSE India, the top defence stocks in India by market capitalization as of 3rd July 2024 are listed here.

1. Hindustan Aeronautics Ltd

• Market Cap: ₹ 358,797.79 Cr.
• Net Profit (latest quarter): ₹ 4292.04 Cr.
• Price to Earning (P/E): 47.31
• ROCE: 38.9 %
• Exchange: BSE, NSE
• Official Website: hal-india.co.in

HAL, or Hindustan Aeronautics Limited, is a leading Indian company. It has a history of eight decades in the aerospace and defense industries. HAL is a government-owned enterprise affiliated to the Ministry of Defence. HAL is a major player in the aerospace industry and a top producer of aircraft, helicopters and related parts for the Indian Armed Forces. The business offers a wide range of products including unmanned aerial vehicles (UAVs), contemporary light helicopters, and fighter aircraft such as Tejas and Sukhoi-30MKI. According to the May 2024 conference call, the firm expects a significant capital expenditure plan over the next five years, with an expected expenditure of Rs 14,000 to 15,000 crore per year. HAL is in charge of the design, development and manufacture of a range of aircraft systems. For India's armed forces, these systems include engines, avionics, helicopters and airplanes.

2. Bharat Electronics Ltd

• Market Cap: ₹ 223,971.66 Cr.
• Net Profit (latest quarter): ₹ 1796.67 Cr.
• Price to Earning (P/E): 56.21
• ROCE: 34.75 %
• Exchange: BSE, NSE
• Official Website: bel-india.in

Another important Defence Public Sector Unit (PSU) under the Ministry of Defence is Bharat Electronics Limited (BEL), which was established in 1954. BEL specializes in the production of electrical products. They design and manufacture a variety of electrical equipment for the Indian Armed Forces. Radar and communication equipment are included in their products. Also included are equipment for electronic warfare. Manufacturing a wide range of products for the Indian Armed Forces and other government ministries, BEL is a major player in the defence electronics industry. Radar, communication systems, electronic warfare systems and night vision devices are among the products offered by the corporation. BEL has a strong order book, with a capital expenditure target of ₹700 crore to ₹800 crore for the next two years. As per the most recent conference call, capital expenditure for the year is estimated to be around ₹700 crore. The company's future growth is promising due to its emphasis on research and development, as well as efforts to diversify into new product areas, including artificial intelligence and cybersecurity. The non-defence division of Bharat Electronics covers a wide range of subjects, including turnkey projects, telecommunications and broadcasting systems, e-mobility, cyber security, e-governance systems, homeland security and civilian radars. Ballistic missile systems, radar transmitters, sonar-based technology, electronic voting machines and other products are among the many items that BEL offers through its subsidiaries and joint ventures with domestic and foreign businesses.

3. Solar Industries India Ltd

• Market Cap: ₹ 98,804.75 Cr.
• Net Profit (latest quarter): ₹ 242.71 Cr.
• Price to Earning (P/E): 108.09
• ROCE: 32.47 %
• Exchange: BSE, NSE
• Official Website: solargroup.com

Founded as a single-site manufacturing company in 1995 by visionary Mr. Satyanarayan Nandalal Nuwal, Solar Group has become a globally known manufacturer of industrial explosives. We have entered the defense industry and established one of the most integrated ammunition facilities in the world thanks to our vast experience, knowledge and capability, which are based on our years of experience in the industrial explosives field. The journey of the Solar Group began in 1984 when Mr. Satyanarayan Nuwal established the private company Solar Explosives to engage in the trade of explosives. This year, Solar Explosives received the first consignment agency account from one of the largest Indian explosives production companies at that time.

4. Cochin Shipyard Ltd

• Market Cap: ₹ 59,510.19 Cr.
• Net Profit (latest quarter): ₹ 264.67 Cr.
• Price to Earning (P/E): 73.26
• ROCE: 21.42 %
• Exchange: BSE, NSE
• Official Website: cochinshipyard.com

Another renowned Indian shipyard with a prime location in Kochi, Kerala is Cochin Shipyard Limited (CSL). Established in 1972, CSL focuses on the construction of commercial vessels, including bulk carriers, offshore auxiliary vessels and tankers. CSL, India's leading maritime company, specialises in the construction of various types of vessels including defence vessels. The business has a state-of-the-art dock and has completed several important projects for the Coast Guard and the Indian Navy. Apart from signing ship repair contracts for medium repairs of two Indian Naval ships worth INR150 crore, CSL's order book includes orders received for a hybrid SOV for the European market. The order book currently stands at INR21,500 crore with significant orders in the commercial and defence sectors, which is a crucial project for the business. In addition, CSL is always looking for opportunities in the market for commercial shipbuilders. The vessels built by Cochin Shipyard include defence vessels such as aircraft carriers, hydrographic survey vessels, quick patrol vessels, offshore patrol vessels and pollution control vessels. It also provides marine engineering instruction, ship maintenance services for both commercial and military vessels and a variety of other facilities.

5. Bharat Dynamics Ltd

• Market Cap: ₹ 59,199.82 Cr.
• Net Profit (latest quarter): ₹ 288.78 Cr.
• Price to Earning (P/E): 96.60
• ROCE: 24.23 %
• Exchange: BSE, NSE
• Official Website: bdl-india.in

Established in 1958, Bharat Dynamics Limited (BDL) is a government-owned enterprise. For the Indian military, the company specializes in the design, development and manufacture of missiles and related products. Being a leading manufacturer of guided missile systems, undersea weapons and related defence equipment, BDL is a government-owned enterprise. In many product categories such as surface-to-air missile systems and anti-tank guided missiles, the business has an almost monopoly. The company's R&D budget for FY24 (6.11% in FY23) accounts for 2-4% of sales. In FY24, it also intends to spend Rs 100 crore on capital expenditure (around Rs 114 crore in FY23). Thanks to its focus on R&D and technical know-how, the business is well-positioned for future growth. Over time, BDL has grown into one of the few businesses in the world with state-of-the-art facilities capable of manufacturing and supplying guided missiles, undersea weapons, aerial objects and other associated military equipment to the Indian Armed Forces.

6. Garden Reach Shipbuilders & Engineers Ltd

• Market Cap: ₹ 27,502.21 Cr.
• Net Profit (latest quarter): ₹ 111.6 Cr.
• Price to Earning (P/E): 77
• ROCE: 28.42 %
• Exchange: BSE, NSE
• Official Website: grse.in

GRSE is a well-known engineering company that manufactures ships and warships for the Indian Coast Guard and Navy. This business has created other types of ships in addition to landing boats, corvettes and frigates. According to the March 2024 conference call, GRSE expects its order book value to remain between Rs 23,000 and Rs 25,000 crore in the coming years. The company is well positioned for growth in the future due to its emphasis on expanding its product line and improving technology.

7. BEML Ltd

• Market Cap: ₹ 18,879.55 Cr.
• Net Profit (latest quarter): ₹ 256.8 Cr.
• Price to Earning (P/E): 67.02
• ROCE: 15.18 %
• Exchange: BSE, NSE
• Official Website: bemlindia.in

BEML was founded in 1964 and started as a manufacturer of rail coaches, mining equipment and spare parts from Bengaluru. The company operates in the mining and construction, rail and metro and defence sectors. BEML is a multifaceted corporation that manufactures rail and metro goods, mining and construction equipment, and military equipment. BEML is a manufacturer of truck systems, ground support equipment and weapon systems for the Indian Army, Navy and Air Force. Diversifying into new product lines and its strong position in many industries brings forth opportunities for the company's growth. The company's major products include defense goods (heavy-duty trucks, bridge systems and recovery vehicles), mining equipment (dozers, dumpers, excavators, loaders and shovels), and rail and metro products (metro cars, electric multiple units and maintenance vehicles). Its manufacturing plants are located in Bengaluru, Mysore, Kolar Gold Fields and Palakkad (Kerala) in the state of Karnataka.

8. Data Patterns (India) Ltd

• Market Cap: ₹ 17,326.22 Cr.
• Net Profit (latest quarter): ₹ 71.1 Cr.
• Price to Earning (P/E): 95.39
• ROCE: 20.14 %
• Exchange: BSE, NSE
• Official Website: datapatternsindia.com

A major supplier of electrical equipment for military and defense applications is Data Patterns. For various military platforms, the company specializes in designing and producing radar, avionics and dangerous electronics systems. With contracts to sell radar warning systems and electronic warfare equipment, Data Patterns has a healthy order book. Due to its emphasis on technology innovation and its relationships with major military companies, the company is well-positioned for future expansion. The defence industry uses electronic solutions of Data Patterns (India) Limited. The company, serving a range of platforms including space, air, land and sea, has over 30 years of experience in the defence and aerospace electronics sector. It has the capability to design a full range of defence and strategic aerospace electronics solutions. Radars, underwater electronics/communications/other systems, electronic warfare suits, small satellites, avionics, BrahMos programme, ATE for defence and aerospace systems and commercial off-the-shelf (COTS) items are all part of its product line.

9. Zen Technologies Ltd

• Market Cap: ₹ 10,925.76 Cr.
• Net Profit (latest quarter): ₹ 37.58 Cr.
• Price to Earning (P/E): 86.59
• ROCE: 46.34 %
• Exchange: BSE, NSE
• Official Website: zen.in

Zen Technologies Limited was founded in 1993 and is a pioneer in the provision of counter-drone solutions to protect borders, critical infrastructure, and other areas. It designs, develops and manufactures state-of-the-art combat training solutions for training defence and security forces worldwide. Zen Technologies has offices in the United States, United Arab Emirates, and Hyderabad, India. Zen Technologies offers more than 40 items in its portfolio, including counter drone solutions, live fire, live instrumented, virtual and constructive training systems for both individual and group training. All these products are conceived and developed in the country. As a recognized leader in the development of training systems to assess and enhance combat readiness, Zen Technologies has sent more than 1,000 simulators and training systems worldwide.

10. Astra Microwave Products Ltd

• Market Cap: ₹ 9,124.73 Cr.
• Net Profit (latest quarter): ₹ 54.4 Cr.
• Price to Earning (P/E): 75.33
• ROCE: 18.73 %
• Exchange: BSE, NSE
• Official Website: astramwp.com

A group of eminent scientists with background in project management for RF/microwave/digital electronics and advanced technology founded Astra Microwave Products Limited (AMPL) in 1991. The three promoters recognized the need for a reliable, technically strong private firm at the time to be able to design, develop and manufacture top-level microwave and radio frequency subsystems as well as systems for critical applications. For the military and aviation industries, Astra Microwave is a leading supplier of microwave circuits, systems, and components. The company's products are used in a variety of defense equipment, such as communication systems, radars, and electronic warfare. Astra Microwave's commitment to research and development enables it to adapt to the rapidly evolving technological demands of the defence sector. The company's diversified clientele, which includes both foreign and Indian military personnel, enhances its expansion prospects. Our mission at Astra Microwave Products Limited is to provide cutting-edge technological solutions that empower our customers in the areas of defense, space, meteorology, homeland security, systems integration, antenna technology, GNSS (Global Navigation Satellite System) and Unmanned Ground Vehicles. Our dedication to quality and innovation guarantees that we will always be at the forefront of providing cutting-edge solutions that specifically address problems in these critical sectors.

Conclusion

There are prospects for investors as Indian defence sector companies are expected to grow substantially in the coming years. Investors can enhance their field of knowledge by closely analyzing individual companies. Due to government support, long-term contractual obligations, and consistent demand for defence stocks, investing in them offers financial benefits. But before investing, you need to think about things like past performance in the market, new developments in technology, etc.