Two Indian defence stocks have delivered spectacular returns in the past year, with MTAR Tech surging 395% and Apollo Micro Systems climbing 185%. According to reports from The Economic Times, this performance is particularly noteworthy as both companies operate in the same sector, making their multibagger status unusual. The rally has been driven by the Nifty India Defence index, which is among only five sectoral indices to have scaled a fresh 52-week high since the Iran war began, with both companies playing a key role in driving this outperformance. As per Meyka AI, India's defence sector has become one of the market's strongest-performing themes in 2026, with rising geopolitical tensions, record defence spending, and the government's push for local manufacturing driving investor interest.
Motilal Oswal has maintained a 'Buy' rating on MTAR Technologies with a target price of ₹8,000, a level the stock has already crossed after the recent rally. As reported by The Economic Times, the brokerage highlighted that MTAR's order book stood at around ₹2,600 crore as of March 2026, supported by a strong pipeline across clean energy, aerospace and defence, nuclear and other product segments. The company reported very strong Q4 FY26 results with revenue rising 67% YoY to ₹306 crore and net profit jumping 223% YoY to ₹44.28 crore. According to Meyka AI, MTAR Technologies has emerged as one of India's biggest multibagger defence and engineering stocks, with analysts expecting the stock to deliver a CAGR of 67% in revenue, 86% in EBITDA and 105% in adjusted PAT over FY26-FY28. The company also benefits from clean energy and aerospace exposure beyond defence, with some market analysts connecting MTAR's growth story to Bloom Energy's expansion in AI data-center power systems.
HDFC Securities maintained its 'Buy' rating on Apollo Micro Systems and raised its target price to ₹400, a level the stock crossed comfortably within less than two weeks. According to The Economic Times, the brokerage expects Apollo Micro Systems to deliver a 50% revenue CAGR between FY26 and FY28, supported by its existing order book of ₹1,430 crore and strong weapons pipeline. The company posted record FY26 financial performance with revenue reaching ₹904 crore and PAT surging 90.5% YoY to ₹107 crore. As reported by Meyka AI, Apollo Micro Systems has quietly become one of India's fastest-growing defence electronics companies, focusing on advanced defence and aerospace electronics. The company strengthened its long-term defence positioning through major strategic moves, including the acquisition of IDL Explosives through its subsidiary Apollo Defence Industries, which expanded capabilities in explosives and UAV manufacturing.
Despite strong growth prospects, both companies face valuation challenges. MTAR continues to trade at expensive valuations with the upside likely to become slower and increasingly dependent on consistent quarterly earnings delivery. As reported by The Economic Times, Apollo Micro Systems is trading at expensive valuations with a PE multiple of over 115x following the recent surge. According to Meyka AI, MTAR remains a high-growth defence engineering company but valuation concerns are increasing after the sharp rally, with some experts warning that the stock could experience sharp corrections after strong rallies. Analysts warn that any slowdown in execution or margin expansion could trigger sharp corrections, making consistent earnings growth and fresh order inflows critical for sustaining investor confidence. The broader defence manufacturing trend continues to support bullish sentiment, but entry timing has become more important after the recent rally, with many investors now asking which stock offers better long-term upside.
