Defence stocks fire up: Apollo Micro, Zen Tech, Garden Reach among 23 stocks that surged up to 61% in May

Defence stocks in focus: Defence stocks such as Garden Reach Shipbuilders, Paras Defence, Apollo Micro Systems, Cochin Shipyard, and Solar Industries ended May with solid gains, driven by strong demand from Dalal Street investors, positioning the defence sector as the month’s top performer.

The Nifty India Defence index concluded the month with a rally of 22%, recovering 70% from February lows, making the sector the biggest turnaround champion in 2025. After remaining under pressure for five consecutive months due to valuation concerns, the sector began recovering in March and extended its gains into April.

However, a fresh wave of optimism was triggered in May by the launch of ‘Operation Sindoor,’ during which India showcased the strength of its indigenously developed defence systems and successfully intercepted drones and missiles launched by Pakistan.

Sentiment was further bolstered after Prime Minister Narendra Modi reiterated the government’s focus on promoting indigenous defence production under the Make in India initiative.

Additionally, strong March quarter earnings, rising order inflows, expectations of rise in defence spending by the Indian government to further strengthen national security, and growing global demand for India’s indigenously manufactured defence products all contributed to a strong rally in defence stocks in the previous month.

This stellar performance also pushed the combined market capitalisation of the 18 Nifty India Defence constituents past the ₹11 lakh crore mark for the first time, reaching ₹11.3 lakh crore. In comparison, the market cap stood at ₹10 lakh crore during the same period last year, indicating an increase of over ₹1 lakh crore, most of which came in May.

Apollo micro leads May defence rally; drones and shipbuilders follow with strong gains

In terms of individual counters, Apollo Micro Systems emerged as the top performer among defence stocks in the May rally, delivering over 60% return as it surged from ₹117 to ₹183 apiece. This also marked the stock’s biggest monthly gain since October 2023, when it had posted a 62% return.

Drone-related stocks, including ideaForge Technology, DroneAcharya Aerial Innovations, Zen Technologies, RattanIndia Enterprises, and Paras Defence and Space Technologies, also surged up to 50%. Meanwhile, shipbuilding stocks delivered stellar performances as well, with Garden Reach Shipbuilders and Cochin Shipyard gaining 57% and 23%, respectively.

Even though Mazagon Dock Shipbuilders tumbled 7.5% in today’s session, it is still up 13.7% for the month of May. Other defence counters such as MTAR Technologies, Bharat Electronics, Mishra Dhatu Nigam, Bharat Dynamics, BEML, Astra Microwave, Data Patterns, Dynamatic Technologies, Cyient DLM, and DCX Systems have also surged by up to 25%.

Policy push and export boom fuel positive outlook for defence sector

The outlook for the defence sector appears promising, as it is increasingly seen as a strong long-term opportunity—bolstered by rising defence budgets, growing export potential, and sustained policy support through initiatives like Make in India and Atmanirbhar Bharat.

India’s domestically manufactured defence products are gaining global traction, with exports reaching a record high of ₹23,622 crore in FY 2024–25. The government now aims to achieve annual defence exports worth ₹50,000 crore by 2029, further expanding its global footprint.

This year, the government allocated ₹6.81 lakh crore to the defence budget. Additionally, reports suggest that an extra ₹50,000 crore boost is under consideration, reflecting the sector’s strong growth momentum.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.