ASX Defence Stocks to Buy for 2026

As governments continue to boost military budgets and accelerate adoption of new defence technology, the following ASX defence stocks offer attractive opportunities heading into 2026.

Codan Limited (ASX: CDA)

is a global defence and communications technology company which is focused on secure wireless communications, tactical networking systems and advanced metal detection products.

The company owns Minelab which is a leading metal detection brand with strong global demand across gold exploration, counter-mine operations and recreational detecting.

For FY25, Codan reported revenue of $674.2 million which grew by 22% and net profit after tax increased 27% to $103.5 million.

The balance sheet is sound with low gearing and Codan expects Communications revenue to grow 15–20% in FY26 driven by new product releases.

Austal Limited (ASX: ASB)

recently announced a US$100 million financing agreement from Export Finance Australia to support shipbuilding activities in the United States.

Revenue for FY25 was $1.8 billion which grew by 24.1% from last year and NPAT was $89.7 million backed by excellent execution.

The company earns revenue through designing and manufacturing ships while also supporting them through maintenance which creates recurring income.

Austal maintains a $13.1 billion order book and operates mainly across defence shipbuilding which contributed 97% of FY25 revenue.

Elsight Limited (ASX: ELS)

is a defence-focused connectivity company which is developing secure real-time communication systems for unmanned and autonomous platforms.

The company recently reached a key milestone after being selected by the U.S. Defense Innovation Unit to progress to Phase 3 of Project G.I. Design Reference Mission 2 which focuses on field testing, operational demonstrations and regulatory clearances.

Revenue for the half-year ending June 2025 climbed 344% to US$4.85 million, net loss reduced to US$761,112 from US$1.7 million last year and operating cashflow reached US$5.94 million.

Elsight expects ongoing momentum to continue as defence procurement activity increases and the company is now scaling manufacturing capacity in a NATO-aligned region to support future growth.

DroneShield Limited (ASX: DRO)

has recovered its positive momentum after experiencing hiccups earlier in the month which led to dip in the share price.
The company announced a $5.2 million follow-on contract on 25 November 2025 with a European military customer and cash conversion is expected in 4Q25.

The company also pointed out that this same reseller has placed 12 contract orders worth more than $70 million over the past three years.

The share price weakness earlier in the month came from an administrative error that caused confusion around contract values and the vesting of 44.45 million performance options which added selling pressure as the market reacted to possible dilution but the company is well positioned to scale as a leading counter-drone and electronic warfare provider in the upcoming years.

(Source: Company Reports)