Domestic Institutional Investors (DIIs) have steadily increased their exposure to select defence stocks over consecutive quarters, reflecting confidence in the sector’s long-term growth prospects.
India’s rising defence budget, stronger focus on indigenous manufacturing, increasing export opportunities and healthy order pipelines have supported institutional interest. Consistent DII accumulation is viewed as a sign of conviction in a company’s fundamentals and earnings visibility.
While institutional buying can be a positive indicator, investors should also assess valuations, execution capabilities, balance sheet strength, and order inflows before making investment decisions, as stock performance depends on business execution and future earnings growth.
Here are 4 defence stocks where DIIs have hiked stake in consecutive quarters.
#1 Avantel
Avantel offers innovative, customized network centric solutions through products for defence platforms including Ships / Submarines / Aircraft / Helicopters.
The company’s products enable highly secure, seamless, long-range communications over satellite and HF for network-centric operations of Defence Forces on the mainland & high seas.
DII Holding Pattern for Last Three Quarters
| December 2025 | 0% |
| March 2026 | 0.9% |
| June 2026 | 1.1% |
Source: Trendlyne
From a zero per cent stake in the quarter ending December 2025, DIIs have hiked their stake in the company to 1.1% by the end of June 2026.
On the order book front, Avantel presently has an order book of approximately Rs 7,200 m to be executed across FY27 and FY28.
This is in addition to the orders in the pipeline and expected in the next two years.
On the financial front, the company saw revenues at Rs 704m in Q1 FY27 m vs Rs 519 m YoY. Avantel reported a net profit of Rs 54 m vs Rs 32 m YoY.
Avantel is positioned to benefit from rising Indian defence spending through its expanding portfolio in satellite communications, software-defined radios, radar systems and defence networking. A healthy order book, strong R&D, and indigenous technology support long-term growth.
However, execution, timely order conversion and dependence on government procurement remain the key factors to watch.
#2 Astra Microwave Products
Next on the list is the stock of Astra Microwave.
The company is a Hyderabad-based defence electronics company specialising in RF (radio frequency) and microwave sub-systems used in radars, electronic warfare, missiles, satellites, telemetry, and communication systems.
DII Holding Pattern for Last Three Quarters
| December 2025 | 14.8% |
| March 2026 | 15.4% |
| June 2026 | 16.1% |
Source: Trendlyne
Over the last few quarters, DIIs have gradually hiked their stake, and the stake by the end of the June 2026 quarter stands at 16.1%.
On the order book front, in Q4 FY26 alone, Astra secured fresh orders worth approximately Rs 5,300 m, taking its total order book to a robust Rs 21.41 bn as on 31 March, and concluded PNC of Rs 3,000 m more orders which are expected to be received in next couple of months.
Going forward, the management says they have a clear visibility of approximately Rs 16 bn plus orders which can be booked in the current year, that is FY27. Around 25% of this is expected to come from R&D programs, while the balance is driven primarily by production orders.
On the financial front, Astra Microwave reported revenues of Rs 4,882 m in Q4FY26 vs Rs 4,079 m YoY. The net profits of the company were placed at Rs 1,069 vs Rs 746 m YoY.
#3 Garden Reach Shipbuilders and Engineers
Next on the list is the stock of Garden Reach Shipbuilders and Engineers.
Garden Reach Shipbuilders & Engineers (GRSE) is one of India’s leading defence shipyards under the Ministry of Defence.
Based in Kolkata, it primarily designs and builds warships for the Indian Navy and Coast Guard, while also manufacturing marine equipment, portable steel bridges, and undertaking ship repairs.
DII Holding Pattern for Last Three Quarters
| December 2025 | 1.6% |
| March 2026 | 1.7% |
| June 2026 | 1.9% |
Source: Trendlyne
Over the last few quarters, DIIs have increased their stake in the company from 1.6-1.9%. Q1FY27 has again been a strong quarter for the company.
The total income stood at Rs 19.14 bn, recording a YoY growth of 38% when compared to Q1 FY26 results. The profit after tax has moved up by 44% from Rs 1.2 bn to Rs 1.73 bn during this period.
The company is undertaking both brownfield and greenfield capacity expansion initiatives to strengthen its shipbuilding capabilities, support future growth, and enhance its ability to execute larger and more complex projects.
GRSE built three ships INS Dunagiri that is the second P17A Alpha stealth frigate, INS Sanshodhak, the last of the four-Survey Vessel Large and INS Agrai, the fourth ship of the eight-ship Anti-Submarine Shallow Water Craft project, were commissioned into the Indian Navy by PM Narendra Modi at Kolkata on 21 June 2026.
In addition, GRSE is focusing on new technology adoption and maximizing the use of robotics in its production processes, both in core shipbuilding as well as in bailey bridge fabrication.
#4 Bharat Dynamics
Next on the list is the stock of Bharat Dynamics.
Bharat Dynamics Limited (BDL) is one of India’s leading defence public sector companies and the country’s primary manufacturer of guided missile systems.
Established in 1970 under the Ministry of Defence, BDL works closely with DRDO and global OEMs to manufacture missiles, torpedoes, launchers, and associated weapon systems for the Indian Armed Forces.
DII Holding Pattern for Last Three Quarters
| December 2025 | 10.9% |
| March 2026 | 11.0% |
| June 2026 | 11.5% |
Source: Trendlyne
DIIs have hiked stake in the company and presently hold a stake of 11.5%. On the financial front, the company reported revenues of Rs 24.42 bn for FY26 with a net profit of Rs 4.2 bn.
The company’s total Order Book as on 31 March 2026 is Rs 261.76 bn.
Bharat Dynamics remains one of India’s top defence players, supported by a large order book, indigenous missile programs and rising defence spending. The principal challenge is execution.
Conclusion
While sustained institutional buying may signal confidence in a company’s prospects, investors should also evaluate valuations, execution capability, balance sheet strength, order inflows and more, as long-term stock performance is driven by business execution and earnings growth.
Investors should evaluate the company’s fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.
Happy investing.
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