Tue, 23 Jun 2026
01:48:39 am
Rudransh Sangwan
Published at: June 22, 2026, 9:23 PM
Synopsis
Defence stocks with PEG ratios below 1 and order books worth up to ₹15,324 crore are gaining investor attention. Explore GRSE, Sigma Advanced Systems, Sika Interplant, Krishna Defence, CFF Fluid Control, and C2C Advanced Systems, along with their financials, order books, growth prospects, and investment outlook.

India's defence sector is witnessing unprecedented growth driven by rising defence spending, the government's Make in India initiative, increasing defence exports, and a strong focus on indigenisation. Investors looking for growth-oriented defence stocks are increasingly tracking companies with low PEG ratios, as these may indicate undervaluation relative to future earnings growth.
A PEG ratio below 1 is often considered attractive because it suggests a stock's valuation may not fully reflect its expected earnings growth. Several defence companies currently combine low PEG ratios with strong return ratios, healthy balance sheets, and robust order books.
Before looking at these defence stocks, it is important to understand the PEG Ratio, one of the most widely used valuation metrics for growth companies.
PEG Ratio (Price/Earnings to Growth Ratio) measures a company's valuation relative to its expected earnings growth rate.
| PEG Ratio | Meaning |
|---|---|
| Below 1 | Stock may be undervalued relative to its growth potential |
| Around 1 | Fairly valued based on expected growth |
| Above 1 | Stock may be overvalued compared to growth expectations |
For example, if a company has a P/E Ratio of 20 and an expected earnings growth rate of 40%, its PEG Ratio would be 0.5, suggesting the stock could be attractively valued considering its future growth prospects.
Unlike the traditional P/E Ratio, which only measures valuation, the PEG Ratio combines valuation and growth into a single metric.
A company may appear expensive on a P/E basis but could still be attractive if its earnings are growing rapidly.
India's defence sector is witnessing strong growth due to:
Companies with strong order books, healthy earnings growth, and PEG ratios below 1 may offer attractive long-term investment opportunities if they can continue delivering on their growth expectations.
| Factor | Ideal Situation |
|---|---|
| PEG Ratio | Below 1 |
| Revenue Growth | Rising |
| Profit Growth | Consistent |
| Order Book | Strong and Growing |
| Debt Levels | Low |
| Return Ratios (ROE/ROCE) | High |
With that understanding, let's look at the defence stocks with PEG ratios below 1 and order books worth up to ₹15,324 crore that investors should keep on their radar.
| Company | Market Cap | PEG Ratio | ROCE | ROE |
|---|---|---|---|---|
| GRSE | ₹32,716 Cr | 0.86 | 43.0% | 31.8% |
| Sigma Advanced Systems | ₹9,719 Cr | 0.14 | 60.8% | 90.6% |
| Sika Interplant Systems | ₹2,459 Cr | 0.92 | 35.2% | 26.1% |
| Krishna Defence | ₹2,075 Cr | 0.56 | 30.8% | 23.7% |
| CFF Fluid Control | ₹1,781 Cr | 0.77 | 23.5% | 18.9% |
| C2C Advanced Systems | ₹679 Cr | 0.11 | 26.2% | 21.0% |
Garden Reach Shipbuilders & Engineers Limited (GRSE) is a government-owned defence shipyard operating under the Ministry of Defence. The company specializes in building:
GRSE primarily serves the Indian Navy and Indian Coast Guard.
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| Metric | Value |
|---|---|
| Market Capitalisation | ₹32,716 Crore |
| PEG Ratio | 0.86 |
| ROCE | 43.0% |
| ROE | 31.8% |
| Debt-to-Equity | 0.01 |
GRSE currently has an order book of ₹15,324.13 crore, covering:
Management believes the decline in order backlog below ₹20,000 crore reflects faster project execution rather than weaker demand.
GRSE remains one of India's strongest defence manufacturing plays due to its naval shipbuilding expertise, strong government support, and healthy execution pipeline.
Sigma Advanced Systems operates in the defence electronics and aerospace segment.
Its core capabilities include:
The company supplies products to defence PSUs and strategic defence programs.
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| Metric | Value |
|---|---|
| Market Capitalisation | ₹9,719 Crore |
| PEG Ratio | 0.14 |
| ROCE | 60.8% |
| ROE | 90.6% |
| Debt-to-Equity | 0.71 |
Sigma has one of the lowest PEG ratios among listed defence companies while maintaining exceptionally high return ratios, indicating strong earnings growth potential.
Increasing defence electronics demand and India's focus on indigenous military technology could support future growth.
Sika Interplant Systems provides specialized engineering solutions to aerospace, defence, and automotive sectors.
Its product portfolio includes:
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| Metric | Value |
|---|---|
| Market Capitalisation | ₹2,459 Crore |
| PEG Ratio | 0.92 |
| ROCE | 35.2% |
| ROE | 26.1% |
| Debt-to-Equity | 0.00 |
The company operates with a debt-free balance sheet and has built long-standing relationships with defence and aerospace organizations.
Growing indigenous aerospace manufacturing and defence modernization programs could drive future demand.
Krishna Defence & Allied Industries manufactures:
The company caters to both public and private defence customers.
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| Metric | Value |
|---|---|
| Market Capitalisation | ₹2,075 Crore |
| PEG Ratio | 0.56 |
| ROCE | 30.8% |
| ROE | 23.7% |
| Debt-to-Equity | 0.01 |
| Particulars | Value |
|---|---|
| Order Book | ₹103.4 Crore |
| Tender Pipeline | ₹221 Crore |
The company maintains a healthy order pipeline that could support future revenue visibility.
Strong defence infrastructure spending and rising domestic procurement opportunities remain key growth drivers.
CFF Fluid Control develops and manufactures critical systems used in defence and naval applications.
Its product portfolio includes:
| Metric | Value |
|---|---|
| Market Capitalisation | ₹1,781 Crore |
| PEG Ratio | 0.77 |
| ROCE | 23.5% |
| ROE | 18.9% |
| Debt-to-Equity | 0.07 |
The company has carved out a niche position within India's naval ecosystem and continues benefiting from defence shipbuilding programs.
Rising naval modernization spending and indigenous submarine and warship programs could support long-term growth.
C2C Advanced Systems focuses on next-generation defence technologies.
Its expertise includes:
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| Metric | Value |
|---|---|
| Market Capitalisation | ₹679 Crore |
| PEG Ratio | 0.11 |
| ROCE | 26.2% |
| ROE | 21.0% |
| Debt-to-Equity | 0.22 |
The company has the lowest PEG ratio among the stocks discussed and operates in high-growth segments such as AI and autonomous defence systems.
Increasing defence digitization and AI adoption could create significant opportunities over the coming decade.
While these defence stocks offer attractive growth potential, investors should monitor:
Defence stocks with low PEG ratios and strong order visibility could offer attractive opportunities for long-term investors seeking exposure to India's rapidly expanding defence sector. Among the companies discussed, GRSE stands out for its massive order book, while Sigma Advanced Systems and C2C Advanced Systems offer exposure to high-growth defence technology segments. Investors should combine valuation analysis with business quality, order execution capability, and sector outlook before making investment decisions.

Financial journalist specializing in market analysis, stock research, and investment trends. Dedicated to providing accurate, timely insights for informed decision-making.
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