Defense Stocks: After giving excellent returns for the last four years, the Nifty India Defense Index has definitely slowed down in 2025. Although the pace of growth has not been the same as before, yet the index remains up by about 19 percent in the year 2025.
Long term performance still strong
Despite the recent slowdown, the long-term track record of the index has been quite strong. In 2020, the index gave a return of 9.5 percent. After this, a sharp increase of 56.7 percent was seen in 2021 and 63.9 percent in 2022. The defense index witnessed a strong jump of 88.2 percent in 2023, while in 2024 it recorded a strong gain of 54.8 percent.
Big changes in defense manufacturing in 11 years
There has been a big change in India’s defense manufacturing sector in the last 11 years. The country’s highest-ever defense production was recorded in 2023-24, reaching Rs 1.27 lakh crore. This is an increase of 174 per cent over Rs 46,429 crore in 2014–15.
Defense Ministry gave record contract
The Defense Ministry signed a total of 193 contracts during 2024-25. Their total value was Rs 2,09,050 crore. This is the largest figure so far in a single year. Of these, 177 contracts were given to domestic industries. Their value was Rs 1,68,922 crore.
More than 45 major defense orders were announced between January and June 2025. From this, three big trends are clearly visible – Modernization, Indigenization and Global Integration. That means the focus is not just on procurement, but also on technology and connecting with the global supply chain.
Which stocks rose and which fell?
Some stocks in NIFTY India Defense Index have shown good growth during the year 2025. The maximum increase was seen in GRSE. It has given returns of about 49 percent so far. After this, there was a strong rise in stocks like MTAR Technologies and Bharat Electronics.
Paras Defense and Bharat Dynamics gave returns of more than 30 percent. Apart from this, shares like Mazagon Dock, Bharat Forge, Data Patterns, HAL and Cochin Shipyard were also seen trading with gains. However, their momentum remained limited.
On the other hand, a sharp decline was also seen in some defense stocks. The biggest loss was suffered by investors of Zen Technologies, where the stock fell by about 44 percent. Cyient DLM and Unimech Aerospace and Manufacturing also declined by more than 35 percent. Whereas among government companies, BEML and Mishra Dhatu Nigam remained under pressure. Both these stocks have seen a weakness of about 9 to 10 percent so far in the year 2025.
NIFTY India Defense 2025: Top Gainers (YTD)
| stock | YTD returns |
| GRSE | 48.90% |
| MTAR Technologies | 46.40% |
| Bharat Electronics | 36.00% |
| Paras Defense | 33.60% |
| Bharat Dynamics | 30.40% |
| Solar Industries | 26.70% |
| Astra Microwave | 24.70% |
| Dynamic Technologies | 14.50% |
| Mazagon Dock | 13.40% |
| Bharat Forge | 11.60% |
| Data Patterns | 7.00% |
| HAL | 6.00% |
| Cochin Shipyard | 5.40% |
NIFTY India Defense 2025: Biggest Losers (YTD)
| stock | YTD returns |
| Zen Technologies | -43.90% |
| Cyient DLM | -36.80% |
| Unimech Aerospace and Manufacturing | -35.40% |
| BEML | -9.50% |
| Mishra Dhatu Nigam | -9.40% |
Big events to support defense sector in 2025
In the year 2025, the defense sector remained in the eyes of investors due to three big developments – Operation Sindoor, India-US defense deal and India-Russia deal.
- Following the Pahalgam terror attack in April 2025, India carried out precise retaliatory strikes against Pakistan and nine terrorist targets in Pakistan-occupied Jammu and Kashmir under Operation Sindoor. After this, there was a sharp movement in defense stocks.
- Important defense agreements between India and Russia were signed during the visit of Russian President Vladimir Putin to India. Both countries agreed to promote joint manufacturing of military equipment and spare parts.
- Apart from this, America signed a 10-year defense framework agreement with India. This strengthened technology, intelligence sharing and strategic cooperation.
Tremendous jump in defense export-production
India’s defense exports have increased 34 times in the last 11 years. In FY14 where it was Rs 680 crore. At the same time, with 12 percent annual increase in FY25, it reached a record Rs 23,620 crore.
India’s defense production in 2025 will exceed Rs 1.5 lakh crore for the first time. According to Defense Minister Rajnath Singh, this is a clear indication of the country’s strengthening defense industrial base.
In the Union Budget 2025-26, the Defense Ministry has received a record allocation of Rs 6.81 lakh crore, which is 9.53 percent more than last year. Out of this, Rs 1.80 lakh crore has been earmarked for the capital budget of the Armed Forces and Rs 1.12 lakh crore for purchases from domestic industries.
What will be the picture of defense sector in future?
According to the report of Confederation of Indian Industry and KPMG India in June 2025, India’s defense budget may increase to Rs 31.7 lakh crore by 2047. Whereas defense production is estimated to reach Rs 8.8 lakh crore.
In the FY26 budget, the Defense Ministry has decided to celebrate 2025-26 as ‘Year of Reforms’. Its objective is to simplify the defense procurement process, accelerate modernization and ensure better utilization of the budget.
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