Budget-to-Budget Winners: Top Performing Defence Stocks from 2025 to 2026

By Ventura Research Team 3 min Read Jan 23, 2026

Defence sector stocks have surged up to 51% since the Union Budget announcement on February 1, 2025, driven by the government’s push for programmes like “Make in India” and Atmanirbhar Bharat, increased expenditure on defence modernisation, and rising geopolitical tensions. Investor interest has been further fueled by growing export opportunities and the government’s focus on self-reliance in defence manufacturing.

In the Union Budget 2025, India allocated ₹6.81 lakh crore to the defence sector, a 9.5% increase from the previous year. Of this, around ₹1.80 lakh crore was earmarked for capital expenditure on modernisation and procurement, while the remainder covered operational costs, salaries, and pensions. This represented about 13.45% of the total budget and roughly 1.9% of GDP.

Despite a recent pullback, investor confidence remains strong due to supportive government policies and reforms. The sector continues to be highly sensitive to geopolitical developments, global conflicts, defence agreements, and major policy changes, keeping it in focus for both institutional and retail investors.

Top Performing Defence Stocks from Last Budget to Budget 2026

The pack of defence stocks, the Nifty India Defence Index, surged 22.29% from February 1, 2025. Among its constituents, the top five performers logged gains within the range of 25% to 51%.

Let's look at them one by one:

MTAR Technologies Gained 51%

MTAR Technologies emerged as the best-performing defence-linked stock of the period with a rise of approximately 51%, moving from ₹1,606.85 to ₹2,427.10.

The stock price surge was driven by a combination of factors highlighted across the last one year: the company delivered record revenues and strong EBITDA growth, underpinned by ramp-ups in clean energy (Bloom Energy wallet-share expansion), civil nuclear (Kaiga 5&6 and refurbishment tenders), and aerospace & defense (new Hyderabad unit, export opportunities, first-article-to-serial transitions). Investor confidence was further boosted by a clear multi-year growth roadmap and strategic entry into Oil & Gas (Weatherford program).

BEL continued to prove why it is considered the backbone of India’s defence electronics ecosystem, with its stock advancing by around 47%, rising from ₹281.80 to ₹415.80 over the year.

Bharat Electronics delivered a strong performance in H1 FY26, reporting revenue of ₹10,180 crore, up 15.9% year-on-year, and PAT of ₹2,255 crore, a 20.8% increase. EBITDA margin stood at 30.15%, driven by a favorable product mix, indigenization initiatives, and operational efficiency. According to the con-call of Q2FY26, the company’s order book reached ₹75,600 crore, supported by key programs such as QRSAM, NGC corvettes, Project Kusha, LCA Mk1A avionics, and various electronic warfare systems, along with a pipeline of emergency procurement orders worth approximately ₹3,350 crore.

Garden Reach Shipbuilders & Engineers (GRSE) Gained 43%

Since February 1,2025, GRSE delivered a strong 43% gain from ₹1,596.65per share to ₹2,284.80 per share. As one of India’s primary defence shipyards, GRSE capitalised on sustained naval capex and multiple shipbuilding contracts for patrol vessels, frigates, and survey ships.

GRSE delivered strong Q2 FY26 results, with revenue up 45% YoY and PAT up 57%, driven by peak execution of P-17A and other naval programs. The order book stands at ₹20,206 cr, now 17% non-defence, with large upcoming awards including NGC corvettes (₹30,000 crore) and P-17 Bravo, supporting near- and medium-term growth. Management is expanding capacity via brownfield upgrades and a greenfield West Coast yard, while weapons systems and export programs add diversification and margin upside.

Solar Industries Posted 27% Gains

Solar Industries posted a steady rise of approximately 27%, increasing from ₹10,076.80 to ₹12,845.00. The firm’s defence business, especially in ammunition, explosives, and propulsion systems for rockets and missiles, gained traction amid rising procurement for artillery and strategic systems.

Solar Industries is driving growth through defence and international markets, with a ₹15,500 crore defence order book (including ₹8,000 cr international), key programs like Pinaka, 155 mm shells, loitering munitions, and counter-drone systems, while domestic mining demand was hit by monsoons. Management expects defence revenue to reach ₹3,000 crore in FY26 and remains confident in full-year guidance, despite temporary capex and working capital pressures.

Astra Microwave Saw a Healthy Gain of 26%

Astra Microwave saw a healthy gain of about 26%, rising from ₹721.25 to ₹905.40 between the two budget periods. Known for its RF, microwave, radar, and satellite communication subsystems, the company benefited from India’s rising demand for electronic warfare and surveillance capabilities. Margin improvement was product-mix driven, and the company highlighted strong defence orders, including radars, EW modules, and the Su-30 EW suite, alongside JV wins with Astra Rafael Comsys. Near-term order inflows and receivable collections are improving cash flows.

Multi-year programs like QRSAM, Uttam, Virupaksha, and space initiatives underpin a roadmap to double turnover in 3-4 years, while export, counter-drone, and space projects provide optionality, though timing, competition, and space execution remain key risks.

Conclusion

Between Budget 2025 and Budget 2026, defence stocks showcased strong performance driven by indigenous manufacturing, export growth, strategic procurement pipelines, and geopolitical imperatives. The top performers, MTAR Technologies, BEL, GRSE, Solar Industries, and Astra Microwave, represent different pillars of India’s defence ecosystem, ranging from electronics and shipbuilding to propulsion and strategic components. As India continues pursuing self-reliance in defence and expands global exports, the sector remains structurally attractive, with long-term growth drivers intact.