Paras Defence, to MTAR Tech, HAL: Defence stocks rally as India’s defence production touches all-time high

India’s defence production hit a record ₹1.78 lakh crore in FY26, driving share prices up for defence firms. The sector experienced 15.6% growth from FY25, with increased private sector contributions and strong export performance boosting confidence in the industry’s future.

Shares of defence stocks witnessed strong buying interest on Wednesday after the government announced that India’s defence production touched an all-time high of ₹1.78 lakh crore in FY26, highlighting the sector’s rapid expansion and strengthening the long-term growth outlook for domestic manufacturers.

Paras Defence and Space Technologies emerged as the biggest gainer among listed defence stocks, rallying over 18% to ₹1286.55. Data Patterns soared 6.6% to ₹4773.70. Moreover, Bharat Dynamics and Garden Reach Shipbuilders & Engineers gained around 6% each to ₹1310.30 and ₹2817.30, respectively. Hindustan Aeronautics Ltd (HAL) and Cochin Shipyard advanced around 5% to ₹4460.35 and ₹1501.05, respectively.

Other major defence counters also traded higher. Mazagon Dock Shipbuilders rose 3.4% to ₹2551.60, Bharat Electronics Ltd (BEL) added 3% to ₹419.80, and Bharat Forge climbed 0.51% to ₹2,022.60.

The gains came after the Ministry of Defence disclosed that the country’s defence manufacturing output reached a record ₹1.78 lakh crore during FY26, underscoring the growing scale of India’s defence industrial ecosystem and the increasing role of domestic companies in meeting military requirements.

Defence production doubles since FY21

According to the Ministry of Defence, defence production rose 15.6% from ₹1.54 lakh crore recorded in FY25. The latest figure also marks a 110% increase compared with FY21, when India’s defence production stood at ₹84,643 crore.

Defence Minister Rajnath Singh credited the achievement to the government’s policy push and industry-wide participation.

“Under the inspiring leadership of PM Shri Narendra Modi, India’s defence production is reaching new heights every year. I am delighted to inform everyone that India’s annual defence production has surged to an all-time high of ₹1.78 lakh crore in the Financial Year 2025-26,” Singh said in a post on X.

Emphasising the scale of growth achieved over the past few years, Singh added: “This milestone represents an impressive 15.6% growth over the previous fiscal year’s output of ₹1.54 lakh crore and a staggering 110% increase since FY 2020-21, when the figure stood at ₹84,643 crore. Indigenous defence production has increased nearly fourfold from ₹43,746 crore in FY 2013-14.”

The ministry said Defence Public Sector Undertakings (DPSUs) and other public-sector entities accounted for around 76% of total defence production during FY26, while private-sector companies contributed the remaining 24%.

Private sector and exports gather momentum

One of the notable highlights of FY26 was the growing participation of private companies in defence manufacturing. Private-sector production reached a record level of around ₹42,000 crore during the year, compared with a 22% contribution to total output in FY25.

The increase reflects the government’s continued efforts to encourage domestic private players to participate in defence manufacturing and reduce dependence on imports.

The sector’s export performance also remained strong. India’s defence exports climbed to a record ₹38,424 crore in FY26, reinforcing confidence about the long-term growth potential of Indian defence companies in global markets.

Highlighting the broader industry outlook, Singh said: “The remarkable rise in India’s defence production in recent years is the result of the collective efforts of the Department of Defence Production and all other stakeholders. This upward trajectory is a clear indicator of the country’s expanding defence industrial base. With sustained policy support, several new initiatives, increased private sector participation, and growing export capabilities, the defence production sector is poised for continued acceleration in the years ahead.”

The Ministry of Defence said the latest milestone reflects the growing momentum of the government’s self-reliance drive in defence manufacturing under the Aatmanirbhar Bharat initiative led by Prime Minister Narendra Modi. The record production and export numbers, coupled with rising private-sector participation, have further strengthened investor confidence in the sector, resulting in broad-based gains across listed defence stocks.