Synopsis:
The Indian defence industry is seeing more private companies getting involved, and some smaller firms are showing great potential. These companies are benefiting from the government’s focus on making India self-reliant in defence and are winning important contracts in different areas.
The Indian defence sector is attracting investors due to the focus on self-reliance and modernizing the armed forces. Some lesser-known hidden gem companies are also doing well in areas apart from their core business, like aerospace parts, defence electronics, and space technology.
The defence stocks listed below are considered hidden gems:
1. Honeywell Automation India Limited
The company is a leading company in the electronics, instrumentation, and process control industry. It provides integrated automation and software solutions that help increase productivity, improve comfort, and ensure safety for homes and businesses
In the defense space, it provides advanced automation and control solutions to improve the efficiency and reliability of defense infrastructure and aerospace operations. The company works closely with Indian defense organizations, offering technological support and solutions that meet national defense requirements.
With a market capitalization of Rs.31,921.04 crore, the shares of Honeywell Automation India Limited closed at Rs.36,103.55, down by 1.28 percent from the previous close of Rs.36,571.35
In Q1 FY26, the company reported revenue of Rs.1,183 crore, up from Rs.960 crore in Q1 FY25. Net profit also declined to Rs.125 crore from Rs.136 crore. The company’s return on equity is 13.7 percent, and return on capital employed is 18.4 percent. P/E ratio of the company stands at 63.13, with the industry average of 35.76.
2. Adani Enterprises Limited
Adani Enterprises Limited, the main company of the Adani Group, is a rapidly growing diversified business offering a wide range of products and services. The company is involved in mining, resource logistics, and new energy, including solar module and cell manufacturing.
In the defence space, it collaborates with global original equipment manufacturers and indian micro, small, and medium enterprises to manufacture a wide range of defence equipment, including fighter aircraft, unmanned aerial systems, helicopters, air defence guns, and missiles.
With a market capitalization of Rs.2,93,525.47 crore, the shares of Adani Enterprises Limited closed at Rs.2,543.15, down by 1.24 percent from the previous close of Rs.2,575.05
In Q1 FY26, the company reported revenue of Rs.21,961 crore, down from Rs.25,472 crore in Q1 FY25. Net profit also declined to Rs.976 crore from Rs.1,772 crore. The company’s return on equity is 9.82 percent, and return on capital employed is 9.45 percent. P/E ratio of the company stands at 84.49, with the industry average of 84.49.
3. Larsen & Toubro Limited
Larsen & Toubro Limited is an Indian multinational company involved in engineering, procurement, and construction projects, advanced manufacturing, and various services. The company is operating in over 50 countries.
In the defense space, the company collaborates with the Defence Research and Development Organisation, the Indian Space Research Organisation, and the Indian Armed Forces to develop and manufacture a wide array of defence systems, such as weapon delivery systems, artillery, armoured vehicles, naval platforms, and aerospace components.
With a market capitalization of Rs.5,13,233.70 crore, the shares of Larsen & Toubro Limited closed at Rs.3,731.10, up 2.38 percent from the previous close of Rs.3,644.20.
In Q1 FY26, the company reported revenue of Rs.63,676 crore, up from Rs.55,120 crore in Q1 FY25. Net profit also climbed to Rs.4,318 crore from Rs.3,445 crore. The company’s return on equity is 16.6 percent, and return on capital employed is 14.5 percent. P/E ratio of the company stands at 32.54, with the industry average of 20.60.
Written by Jhanavi Sivakumar
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