India’s defence sector outperformed all others in May 2025, led by explosive stock rallies across shipbuilding, drone, and electronics companies. The Nifty India Defence Index rose by 22%, backed by strong investor interest, earnings performance, government policy support, and the successful showcasing of indigenous capabilities under ‘Operation Sindoor’.
India’s defence sector recorded a spectacular rally in May 2025, with companies such as Apollo Micro Systems, Garden Reach Shipbuilders, and Zen Technologies among 23 stocks that surged as high as 61%, pushing the Nifty India Defence Index up by 22% for the month.
The Nifty India Defence Index, a benchmark tracking the performance of defence-related firms, recovered 70% from its February lows and touched a new milestone with a total market capitalization of ₹11.3 lakh crore. In comparison, the index stood at ₹10 lakh crore in May 2024.
Investor confidence was bolstered by Operation Sindoor, a government-led exercise showcasing India’s indigenously developed missile and drone interception technologies, along with policy support from the central government and strong quarterly results.
Prime Minister Narendra Modi’s renewed emphasis on Make in India and Atmanirbhar Bharat initiatives spurred market enthusiasm. The optimism was reflected in the performance of defence firms across domains such as shipbuilding, electronics, and unmanned aerial systems.
Apollo Micro Systems led the rally, soaring over 60% from ₹117 to ₹183 in May, marking its biggest monthly gain since October 2023. Drone and aerospace companies such as ideaForge Technology, DroneAcharya Aerial Innovations, and Paras Defence and Space Technologies surged up to 50%.
Shipbuilding stocks were another major contributor to the rally. Garden Reach Shipbuilders surged 57%, while Cochin Shipyard climbed 23%. Even with a 7.5% fall on May 31, Mazagon Dock Shipbuilders posted a monthly gain of 13.7%.
Other notable gainers include Zen Technologies, Bharat Electronics, MTAR Technologies, Bharat Dynamics, Mishra Dhatu Nigam, BEML, and Astra Microwave, which posted gains of up to 25%.
India’s defence export boom also played a vital role. Exports reached a record ₹23,622 crore in FY 2024–25, with the government targeting ₹50,000 crore annually by 2029.
This fiscal year, the central government allocated ₹6.81 lakh crore to defence, with media reports suggesting a possible additional outlay of ₹50,000 crore in the coming months.
