India’s defence industry is growing again, with projects worth ₹7 trillion cleared. According to Motilal Oswal, HAL, BDL, and factories will benefit from increased local output, emergency orders, and the need for exports.
India’s defence industry is doing well, and there is data to prove it. The government has already approved defence projects worth ₹7 lakh crore in the past few years, according to a recent study by Motilal Oswal. This gives businesses a steady process with weapons, planes, ships, and gadgets. The story says the new budget will likely increase defence spending, which means the market will get bigger.
There is a fund of 40,000 crore rupees for quick emergency purchases, enabling faster shopping. India is getting a lot more from local businesses now, which is good for profits. At the same time, European countries are increasing their defence spending, making Indian weapons in demand for sale. When you add these things together, the sector gets a long range with steady order flow.
1- Motilal Oswal on the defence sector- Orders worth 7 lakh crore rupees are the backbone
The study says that the projects worth Rs 7 lakh crore that were approved are the basis for the growth of the business. These decisions are approved work that will help keep steady orders for the next few years. The story says that the next budget will likely increase the general defence fund, which means more opportunities for Indian businesses. This big, proven stream reduces production risk and helps ensure that no one has to change their plans across many platforms.
2- Motilal Oswal talks about the defence sector- Making things here improves profits
The story says that India has started getting a lot more tools from businesses in its own country. Before COVID, just 54% of defence goods were bought in the US. In the FY26 budget, this has now gone up to 75%. Ninety-two per cent of all defence contracts went to Indian businesses in FY25. Since more work stays in the country, companies can better control their expenses and don’t need as many foreign parts. The study says a lot of companies think their profits will stay strong or improve because buying goods from within the country gives them more control over costs, schedules, and supply chains.
3- Motilal Oswal on the defence sector- Europe wants more exports
The study says that there is a lot of interest in exports because European countries are raising their defence budgets. India already has weapons like BrahMos, Akash, Pinaka, and 155mm guns that are wanted in other countries. Shipyards such as Mazagon Dock, Garden Reach, and Cochin Shipyard are also talking to buyers in Europe and Asia, according to the story. These foreign sales provide a second way to grow outside of the Indian market and help big sites grow in the long run.
4- Motilal Oswal talks about the defence sector- urgent purchases increase the pace of orders
The story says that the emergency buy fund of 40,000 crore rupees goes through faster approval paths, which leads to quick orders. In the short term, this has created chances for missile systems, guided rockets, air defence units, radar, communication systems, electronic warfare, and electronics. Hindustan Aeronautics will have years of steady work because of the follow-on order for 97 Tejas Mk1A planes. These programs move quickly, so they get paid fast while long-duration projects continue at the same time.
5- Motilal Oswal on defence- Capex gets ready for a long build cycle
The area is going through a strong period of growth, according to the study. There are so many ships that need to be built and repaired that shipyards are now constructing new dry docks, mobile docks, and fresh yards. Missile businesses are expanding their fuel, materials, and radome centres. Companies that work on aviation and defence technology are growing their factories that make radar, communication, and flight systems. This investment creates a long-term outlook that is in line with what is shown by the approved order book. It also gets companies ready for many years of steady production.
According to the Motilal Oswal study on the defence sector, the sector is already in a long output phase. The industry has grown enough that it can keep working on a regular basis. This is because businesses are adding capacity across platforms, and big projects are starting to execute. The report’s guesses for profit growth at companies like Bharat Dynamics are based on facts rather than ideas. By FY28, for example, EPS is expected to rise by 37.3%.
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