India's defence stocks rally on FY25 order surge, FY26 bullish outlook

India's defence sector ends FY25 with record orders as exports, reforms, and robust pipelines fuel bullish outlook for FY26 and beyond, driving strong gains in top defence stocks

Defence stocks have been on a tear, with the Nifty India Defence index hitting all-time highs. Over the past week, the index jumped around 7 per cent, far outpacing the flat performance of the Nifty 50. Over the past month, its 12 per cent gain has trebled the benchmark’s return. Alongside rising tensions between India and Pakistan, the sector’s bullish outlook is underpinned by a strong order backlog, large inflows expected in 2025–26 (FY26) after a record 2024–25 (FY25), and tailwinds from exports.

 

The sector wrapped up FY25 on a firm footing as the Ministry of Defence (MoD) signed 193