Defence stocks in India witnessed a remarkable rally in the first half of calendar year 2025, with shares of companies like Sika Interplant Systems, Mazagon Dock Shipbuilders, and Cochin Shipyard gaining up to 172%. The surge was fueled by rising geopolitical tensions, higher defence spending, and positive brokerage outlooks, reaffirming investor confidence in India’s defence sector.
Indian defence stocks staged an impressive rally in the first half of calendar year 2025, with investors piling into companies like Sika Interplant Systems, Mazagon Dock Shipbuilders, and Cochin Shipyard, amid geopolitical tensions and expectations of increased government spending.
Leading the charge was Sika Interplant Systems, a Bengaluru-based defence and aerospace components manufacturer, which saw its stock soar 172%, rising from ₹509 to ₹1,378. This marked the company’s largest six-month gain since its 2004 listing.
Garden Reach Shipbuilders, based in Kolkata and known for building naval vessels for the Indian Navy, recorded a gain of 85%, rising from ₹1,610 to ₹3,015. During the period, the stock touched an all-time high of ₹3,535.
Other top performers included Mazagon Dock Shipbuilders, a Mumbai-based PSU shipyard specializing in submarines and warships, which gained 45%, and Cochin Shipyard, Kerala’s leading shipbuilder, which rose 35%. Apollo Micro Systems, which provides electronic solutions to the defence sector, posted a 67% gain despite late June profit-booking.
Bharat Dynamics, a key supplier of missile systems to the Indian armed forces, climbed 73% and hit a new high of ₹2,096. Drone-tech firms like Paras Defence and Space Technologies also surged up to 60%, benefiting from global drone modernization trends.
This bullish trend was underpinned by a robust fiscal push. India’s Ministry of Defence (MoD) has allocated ₹6.81 trillion for FY26BE, a 6.3% YoY increase. Analysts now expect this figure to rise 10% in FY27F, reaching ₹7.49 trillion due to evolving geopolitical scenarios.
According to InCred Equities, India’s defence capital outlay saw a 13% increase, earmarked for advanced weaponry, naval vessels, aircraft, border infrastructure, and indigenous R&D. With a 10-year CAGR of 9% in defence allocations, the sector is poised for long-term growth and innovation.
Overall, 13 defence-linked stocks posted gains above 15% in H1 2025, reinforcing investor sentiment and underlining India’s push for self-reliance in defence manufacturing and exports.