Defence Stocks Outlook: Why Valuations Could Be The Big Risk For Investors Now

Defence stocks have strong order books, but valuations are becoming a key concern for investors. Harendra Kumar, MD - Institutional Equities, Elara Capital, explains why he remains cautious on the sector despite its long-term growth opportunity. He highlights the government’s increasing push for private-sector participation, which could reshape the competitive landscape and create new opportunities. While traditional missile and aircraft manufacturing will remain important, defence electronics and innovation could emerge as bigger growth areas. Kumar also stresses that strong order books are already reflected in stock prices, limiting the margin of safety. Watch the full conversation for his outlook on defence stocks.