Defence Stocks Gain As India’s Defence Output Reaches Record ₹1.78 Lakh Crore In FY26

Shares of defence-related companies advanced on June 17 after the Ministry of Defence announced that India’s defence production touched an all-time high of ₹1.78 lakh crore in FY26, reflecting sustained growth in the country’s indigenous manufacturing ecosystem.

Paras Defence and Space Technologies emerged as the top gainer in the segment, rising 11.78% to ₹1,217.70. Hindustan Aeronautics Ltd (HAL) climbed 3.58% to ₹4,408, while Bharat Dynamics gained 4.25% to ₹1,289.30.

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Other defence counters also traded in positive territory. Mazagon Dock Shipbuilders rose 2.37% to ₹2,526, Bharat Electronics Ltd (BEL) added 1.61% to ₹414.10 and Bharat Forge advanced 0.51% to ₹2,022.60.

Defence Production Registers Strong Growth

The rally followed government data showing that defence production increased to ₹1.78 lakh crore in FY26 from ₹1.54 lakh crore in FY25, marking a year-on-year rise of 15.6%.

The latest figure also represents a 110% increase from FY21, when defence production stood at ₹84,643 crore. The Ministry of Defence said the growth reflects expanding domestic manufacturing capacity and increasing participation from both public and private sector companies.

Defence Minister Rajnath Singh, in a post on X, said India’s annual defence production had reached a new milestone under ongoing efforts to strengthen indigenous capabilities. He noted that defence production has nearly quadrupled from ₹43,746 crore recorded in FY14.

Private Sector Participation Expands

According to the Ministry of Defence, Defence Public Sector Undertakings (DPSUs) and other public-sector entities accounted for about 76% of total production during FY26. The remaining 24% came from private-sector companies.

The private sector output was around ₹42,000 crore during the year, showing higher participation from domestic manufacturers. The share of private companies in overall production also increased as compared with the previous financial year.

The government has been encouraging greater private-sector involvement through policy measures aimed at boosting local manufacturing and reducing import dependence in defence procurement.

Defence Exports Also Hit New High

The Ministry of Defence also reported record defence exports of ₹38,424 crore in FY26, adding to the sector’s growth momentum.

Higher exports, coupled with rising domestic production, have strengthened India’s position as a growing defence manufacturing hub. The government said the improvement reflects coordinated efforts across the defence industry and increasing acceptance of Indian-made defence products in international markets.

The latest production and export figures come as the defence sector continues to attract investor attention amid a steady pipeline of procurement programmes and localisation initiatives. The strong FY26 numbers underscore the scale of expansion in the industry and highlight the growing role of domestic companies in supporting India’s defence manufacturing objectives.