Defence Stocks in 2025: Gainers & Losers

Over the years, the Indian defence market segment has been a well-discussed theme in the stock market. Investors have a lot riding on defence sector stocks given the government policy push, geopolitical tensions, and export market opportunities.

But the big question for investors is:

Which Defence Stocks Gainers?

Which Defence Stocks Losers?

The answer to these questions is provided in this article covering Indian defence stocks, including their share price trends, winners and losers, and reasons fuelling or impeding their progress and potential future direction.

Indian Defence Stocks 2025 Gainers and Losers

The Indian Defence Sector

The Indian defence system has a multi-faceted defence strategy focusing on making, marketing, and manufacturing defence equipment and weapon systems. The shift in investment opportunities and focus towards the Indian defence system has the government, defence agencies, and private corporations to support the investment shift.

Investing in Defence Stocks, 2025 and the Indian Defence Market.

The investment opportunities in the Indian defence system continue to grow. The government of India is increasing its support on the Predict, Plan, Prepare philosophy. The Indian defence system market support and the added emphasis from the government have structured shifting priorities for capital and resources.

The emphasis on self-sustainability has grown, as has the sustainability of defence equipment and weapon systems. The geopolitical tensions have shifted the focus from the Indian defence authors to resources on potential hostile and collaborative states and fully or partially unsupervised defence systems to the Indian deployment of defence systems. The development of both defence equipment and weapon systems and marketing defence systems to potential hostile states and unsupervised defence systems.

The primary focus for sustenance remained in self-claimed sovereign states, with the focus remaining primarily on projectile-based defence systems. The support of self-claimed sovereign states with the development of a complex and diverse defence system. The shift in support remains guided by self-claimed sovereign states. The self-claimed sovereign states have remained complex, and the focus on projectile-based systems has remained a priority; guidance from self-claimed states has focused on projectile-based systems.

Reasons for interest in defence stocks in 2025 include:

- Rising budgets on defence

- Robust order books for both PSU and private players

- Increased exports to allied nations

- Greater self-reliance on domestically produced weaponry and platforms

- Favourable geopolitical conditions

Thus, defence sector stocks do not shift from short to long in cyclical plays, but long-term growth trends.

Overview of Defence Sector Stocks in India

The Indian defence sector includes:

- Defence PSUs (Public Sector Units)

- Private defence manufacturing

- Suppliers of electronics, shipbuilding, aerospace, and missile systems

They operate in:

- Aircraft and helicopter manufacturing.

- Building naval vessels and submarines.

- Production of missiles and ammunition.

- Developing radar systems, electronics, and integration systems.

This diversification of sectors explains why Indian defence shares have shown diverse performance in 2025.

Defence Stocks Gainers in 2025

First, let’s examine companies that have gained from defence stocks and have rewarded their investors with good returns due to solid business growth and effective execution.

 

Paras Defence and Space Technologies Ltd.

BEL

BDL

Garden Reach Shipbuilders & Engineers Ltd.

 

Why Defence Stocks Gained In 2025

This was not random for defence stocks in 2025 to rally. The following explains why:

1. Record Defence Budget

India kept increasing its defence spending, and the focus was on purchasing from domestic suppliers.

2. Export Momentum

Indian defence exports achieved new milestones, aiding in the expansion of revenue diversification.

3. Order Book Visibility

Numerous Indian defence shares now possess order visibility spanning multiple years.

4. Policy Stability

Long-term strategic policy visibility has lowered investor uncertainty.

 

Defence Stocks Losers in 2025

Zen Technologies Ltd.

BEML Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

Azad Engineering Ltd.

ITI Ltd.

Why Some Defence Stocks Lost Value in 2025

Recognising defence stocks losers assists in avoiding potential pitfalls.

Key reasons for underperformance:

• Focusing too heavily on one project

• Slow timeline for completion

• Low exports

• High debt or bad overall financial standing

• Investment in the company is too high

• The overall growth of the sector does not mean the same for each individual stock.

Key Differences Between Gainers and Losers in Defence Stocks

Factor	Gainers	Losers
Order Book	Strong & diversified	Limited or uncertain
Execution	Consistent	Delayed
Valuation	Reasonable	Overstretched
Financials	Improving margins	Weak cash flows
Long-term Visibility	High	Low

This comparison will explain why consistent returns were issued with only a few defence sector stocks.

Are Defence Stocks Still Good Investments for 2025?

• The answer is yes, but with caution.

• This sector is still strong overall, however,

• Gaining profit won’t be as simple as it has been with some stocks.

• Choosing the right stock will be the most important factor.

For long-term investors, the best defence stocks India will be the ones with:

• Good overall financial standing.

• Successfully achieving results.

• Good export market.

• Advanced technology.

Future Defence Sector Stocks Outlook

For the Indian defence sector, the overall positive outcomes for the future include:

• Reduced import reliance.

• Increased exports in the defence sector.

• More involvement from the private sector.

• Focus on updated technology.

The positive for this sector is that there will always be new investors. However, it is important to track:

• New contracts

• Overall profit

• New policies

• There is a future in this sector, but it will take time.

How to Determine the Best Defence Stocks in India

Consider the following before you invest in defence shares:

1. The order book size and execution history.

2. The level of debt and available cash.

3. The level of cash flows.

4. The contribution to export.

5. The ratio of Government to Private clientele.

6. The worth of the company versus the expected growth.

Avoid investing in defence shares purely on the grounds that they are defence shares.

Defence Stocks: Unpacking Common Investor Mistakes

• Buying after a drastic price increase/rally.

• Disregarding the company's worth, also known as the company's share price.

• Assuming that all defence shares are of low risk.

• Having overly concentrated your investments in one single stock.

• Engaging in short-term trading in businesses that have long-term cycles, i.e. long-term investments.

• Investing in defence shares is not a short-term theme, consider the long-term theme of defence investing.

Defence Stocks in 2025: Factors Associated with Risk

Just like all themes, strong sectors also face some risks as listed:

• The changed allocation of the budget.

• The delays in the execution of plans.

• The ongoing geopolitical factors.

• The increase in raw materials and associated costs.

• The change of policies or regulations in place.

• A balanced allocation to defence shares is key to successfully investing in them.

 

 

Conclusion

The growth seen from defence sector stocks in 2025 tells us this is no longer a highly speculative theme but a genuine long-term play. Unfortunately, the same cannot be said for the entire universe of Indian defence shares.

Focusing on the fundamentals, valuations, and execution will lead an investor to the best defence stocks India. Unfortunately, those investors who focus on the right execution will be those who end up being disappointed.

 

DISCLAIMER: This blog is NOT any buy or sell recommendation. No investment or trading advice is given. The content is purely for educational and information purposes only. Always consult your eligible financial advisor for investment-related decisions.