Defense is one of the most important parts of the security of any country. It becomes very crucial when you are surrounded by enemy countries. In recent years, the defense market of India has seen a major boom. Due to rapid development in defense sectors, defense stocks have been highlighted for the last two years. In this blog, we will cover the top 7 defense stocks you must have in your portfolio!
Defense Sector in India – A Brief Overview
The companies that manufacture and distribute military weapons, technology, and services represent Defense Stocks. Investors buying these stocks get a chance to be a part of industries serving the nation’s security.
This sector covers Aerospace, land, and naval systems of security. The Indian defense sector plays a pivotal role in dealing with security matters. From manufacturing weapons to making India self-reliant in security affairs, this sector emerged as a game changer in the economy of India.
If you are someone who is considering the risk factor you can go for buying stocks in the defense sector. Now you may ask “Why pick Defense Stocks?” or “How will I benefit from Defense Stocks?” let’s clear all your doubts here.
This article will help you learn about the best defense stocks in India in 2024.
Why to pick Defense Stocks?
Growth potential, increasing border disputes, and geopolitical conflicts are boosting India’s defense sector. The continuous updation and modernization of the Indian Military are drawing investors’ attention to the defense stocks.
The defense sector of India has experienced significant growth over the years. Investors enjoy diverse benefits which include aerospace, electronics, land systems, and naval systems by investing in these stocks. The government’s support of defense industries provides investors with a sense of security and comfort during times of market fluctuations and uncertainty.
The relative stability and long-term benefits are also one of the reasons for expanding the defense stock market. Consistent dividend payouts offer investors a regular source of income and ultimately increase investors’ confidence. These stocks often increase during economic downfalls making them relatively less volatile than the commercial ones.
Top Defense Stocks in India
There are a lot of options available in the defense sector too and you can pick the stock of your choice after investigating and gaining enough knowledge about each one. Here we will have a look at the best defense stocks of India in 2024.
| Company | Market cap(In INR) | Share Price(In INR) |
|---|---|---|
| HAL | 3,50,000 Cr | 5200 |
| Bharat Dynamics | 58,000 Cr | 1582 |
| Cochin Shipyard | 59,000 Cr | 2122 |
| Bharat Electronics(BEL) | 2,26,000 Cr | 309 |
| Mazagon Dock Shipbuilders | 78,000 Cr | 3877 |
| Data Patterns | 16,500 Cr | 2936 |
| Garden Reach Shipbuilders | 18,700 Cr | 1627 |
- Hindustan Aeronautics Limited (HAL)
Hindustan Aeronautics Limited plays a major role in the Indian Defense program and specializes in aircraft manufacturing and maintenance.
It is principally owned by the government under the Ministry of Defense. The company is responsible for designing, developing, and producing aircraft systems that include airplanes, engines, and helicopters.
It was established back in 1940 and is based in Bangalore. Its market capitalization is INR 3,19,340 crore. Some of its products include aircraft such as HAWK, LCA, Su-30 MKI, and helicopters like Dhruv and Chetak.
HAL also offers auto stabilizers, inertial navigation, laser range systems, radio navigation equipment, communication equipment, flight data recorders, and airborne secondary radars.
- Bharat Dynamics limited
Bharat Dynamics Limited is an Indian company responsible for producing defense equipment and manufacturing guided missiles. The company has four manufacturing units with three units located in Telangana itself and one of them in Andhra Pradesh.
It was established in 1970 with headquarters in Hyderabad (Telangana) and is a PSU under the Ministry of Defense. It serves the Government of India and the Defense Forces of the Nation. The market capitalization of Bharat Dynamics Limited is INR 27,914.65 crores.
The company is responsible for designing, developing, and producing missiles and related products for the Indian Armed Forces. Its products include systems like Torpedo Advanced Lightweight (TAL), Varunastra, Medium-range surface air-to-air missiles, anti-tank missiles, and undersea weapon systems.
- Cochin Shipyard Limited (CSL)
Cochin Shipyard Limited is an Indian shipbuilding industry. It specializes in manufacturing tankers, offshore support vessels, battleships, bulk carriers, and other specialized boats for the Indian Navy and Coast Guard.
The market capitalization of Cochin Shipyard Limited is INR 42,800 crores. It was incorporated in 1972 and has served the Indian Navy over the past three decades. In 2013, it launched India’s first indigenous aircraft carrier, INS Vikrant. The company offers repair and refitting services to the Indian Navy and Coast Guard thus extending the lifespan of ships.
Cochin shipyard products include hydrographic survey vessels, aircraft carriers, fast patrol vessels, pollution control vessels, and offshore patrol vessels. Its additional facilities include ship repair services for defense and commercial ships and marine engineering training.
- Bharat Electronics Limited (BEL)
Bharat Electronics Limited is a public sector firm under the Ministry of Defense. BEL is a government-owned company that specializes in producing advanced electronic systems for Indian defense. It designs and develops various electrical devices including radars and communication devices and electronic warfare equipment.
Bharat Electronics was incorporated in 1954 and is one of the nine public sector undertakings of India’s Ministry of Defense. It is designated as “navratna” by the Indian government. The market capitalization of BEL is INR 2,00,287 crores.
The company provides electronic equipment to defense as well as nondefense organizations. Some of its products include electronic welfare systems, avionics, basic electronic systems of aircraft and armored vehicles, land-based radars, C41 systems, and weapon systems.
Additionally, its other services involve cybersecurity, railways, e-governance systems, e-mobility, civilian radars, telecom and broadcast systems.
- Mazagon Dock Shipbuilders Limited (MDSL)
Mazagon Dock Shipbuilders Limited is an Indian shipbuilding company under the Ministry of Defense. The company specializes in manufacturing and repairing ships, submarines, and other services related to it.
It was established as a private firm in 1934 and came under the Indian government in 1960. The company is headquartered in Mumbai, Maharashtra. Since its incorporation, the company has produced 802 vessels, including warships, missiles, and submarines. MDL serves the Indian Navy’s requirements which involve the construction of warships and submarines. The company holds a market capitalization of INR 58,340 crores.
MDL offers services to both defense and non-defense sectors. It is responsible for constructing passenger ships, bulk carriers, ferries, tankers, multipurpose support vessels, tugs, and dredgers. Its additional services include supplying jackets, jack-up rings, main decks of wellhead platforms, and more.
- Data Patterns Limited
Data Patterns India caters to electronic systems and solutions to the Indian Armed Forces. Its contribution to the Indian Defense System includes designing and developing defense products, aerospace applications, ATE and test systems, electronic warfare products, radar systems, software and application products, COTS boards, etc.
The company was incorporated in 1985 and is privately owned. The market capitalization of the company is INR 17,017.73 crores. It is capable of serving various platforms including air, space, land, and sea. Data Patterns has over 30 years of experience in providing services to the defense and aerospace electronics sector.
The company has produced many underwater electronics, electronic warfare suits, BrahMos programs, small satellites, avionics, radars, communications, and other systems.
- Garden Reach Shipbuilders & Engineers Limited.
Garden Reach Shipbuilders & Engineers Ltd (GRSE) is India’s shipbuilding company specializing in producing and exporting naval and commercial vessels.
The company was founded in 1884 and was initially a privately owned firm. It came under the Government of India in 1960 and has headquarters in Kolkata, West Bengal (India). The company holds a market capitalization of INR 185.75 crores.
GRSE is responsible for developing tankers, naval ships, bulk carriers, platform supply vessels, and naval diesel engines. Its products include oceanographic and hydrographic research vessels, marine acoustic ships, tugboats, grab hopper dredgers, and trailing suction hopper dredgers. GRSE already served 108 warships and patrol vessels for the Indian Navy and Coast Guard.
Conclusion
The Indian Defense industry protects and safeguards the country’s boundaries and strategic interests. This industry offers long-term growth potential, a sense of security, and diversification to its investors.
Before diving into the defense investments research well about the company, its revenue generated, profit potentials, and share price. It would help if you always remembered that the defense sector is NOT completely risk-free.
Read More: Invest in the Future by Adding AI Stocks to your portfolio
Understanding the critical parameters of this sector and incorporating smart investment strategies can help you generate good profits and provide you a healthy exposure to this dynamic market.
