Summary
India’s defence sector continues to benefit from rising government spending, indigenous manufacturing initiatives, and growing export opportunities. Among the listed players, GRSE, Sigma Advanced Systems, and Krishna Defence stand out with PEG ratios below 1, indicating potential growth opportunities at attractive valuations.
India’s push towards defence self-reliance is creating significant opportunities for companies operating across shipbuilding, defence electronics, and military equipment manufacturing. As order inflows remain strong and modernization programs gather pace, investors are increasingly looking for businesses that combine growth visibility with reasonable valuations.
One metric often used to identify such opportunities is the PEG ratio. A PEG ratio below 1 is generally viewed as a sign that a company’s expected earnings growth may not be fully reflected in its current valuation.
Garden Reach Shipbuilders & Engineers (GRSE)
Garden Reach Shipbuilders & Engineers is one of India’s leading defence shipyards and plays a crucial role in building warships and naval platforms for the Indian Navy and Coast Guard.
The company currently has an order book worth approximately ₹15,324 crore spread across multiple defence projects, providing strong revenue visibility for the coming years. Management has highlighted that faster execution and project deliveries have contributed to the reduction in order book size compared to previous years.
GRSE also stands out for its strong financial performance. The company reports a PEG ratio of 0.86, ROCE of 43 percent, ROE of 31.8 percent, and virtually debt-free operations, reflecting efficient capital allocation and robust profitability.
Sigma Advanced Systems
Sigma Advanced Systems operates in the high-growth defence electronics and aerospace segment. The company develops products related to electronic warfare, avionics, radar systems, and mission-critical defence technologies.
As India increases its focus on indigenous defence technology, Sigma is emerging as a key beneficiary of this structural trend. The company currently reports a PEG ratio of just 0.14, one of the lowest among defence-related companies.
Its financial metrics remain impressive, with ROCE of 60.8 percent and ROE of 90.6 percent, highlighting strong operational efficiency and earnings growth potential.
Krishna Defence & Allied Industries
Krishna Defence manufactures a wide range of defence and security products including naval systems, specialized containers, military shelters, and composite solutions.
The company continues to benefit from increasing defence procurement and infrastructure development across the armed forces. As of FY26, Krishna Defence reported an unexecuted order book of approximately ₹103 crore along with a tender pipeline exceeding ₹221 crore, providing healthy growth visibility.
Financially, the company maintains a PEG ratio of 0.56, ROCE of 30.8 percent, ROE of 23.7 percent, and a very low debt burden, making it one of the emerging players in India’s defence manufacturing ecosystem.
Why Defence Stocks Remain Attractive
India’s defence industry is entering a long-term growth cycle supported by higher defence budgets, import substitution policies, expanding exports, and the government’s Atmanirbhar Bharat initiative.
Companies with strong order books, healthy balance sheets, and exposure to strategic defence programs are expected to benefit from this multi-year growth opportunity.
Conclusion
GRSE, Sigma Advanced Systems, and Krishna Defence represent three distinct segments of India’s defence ecosystem, ranging from shipbuilding and defence electronics to military equipment manufacturing.
Their combination of PEG ratios below 1, strong profitability metrics, and healthy order visibility makes them stocks worth tracking as India’s defence sector continues its rapid expansion.
Disclaimer: This article is for informational purposes only and should not be considered investment advice. Investors should conduct their own research and consult a financial advisor before making investment decisions.