Austal, Electro Optic Systems, lead ASX defence stocks rally
The defence sector is experiencing strong growth driven by rising global security spending and long-term government commitments which positions the following ASX defence stocks who are securing lucrative contracts for massive growth ahead.
Elsight Limited (ASX: ELS)
on 2 January 2026 announced that it has delivered first batch of its new Aura communications platform to a leading defence contractor which marks the shift from the development phase into full production.
On 17 December 2025, the company announced that it secured a major US$21.2 million contract with deliveries scheduled between January and April 2026 which improves forward order visibility and confirms strong global demand for its Halo connectivity platform across defence and uncrewed systems programs.
For the half year ending June 2025, revenue increased by 344% to US$4.85 million while operating cash flow was US$5.94 million.
Elsight is scaling manufacturing capacity in a NATO aligned region to support the next phase of growth and expects this momentum to continue as defence procurement activity accelerates.
Austal Limited (ASX: ASB)
surged more than 8% on Tuesday and on 19 December 2025, it secured a contract extension to construct two additional Evolved Cape Class Patrol Boats for the Australian Border Force.
The contract is valued at more than $135 million and increases the total number of Evolved Cape Class Patrol Boats awarded to Austal to 14 vessels.
For FY25, the company reported revenue of $1.8 billion which represents growth of 24.1% compared to the prior year while NPAT was $89.7 million.
Austal also announced on 18 December 2025 that it was awarded a $1.029 billion Design and Build contract for the Landing Craft Medium program with construction of the first vessel expected to begin in 2026 and the management expects EBIT of $135 million for FY26.
Electro Optic Systems Holdings Limited (ASX: EOS)
on 23 December 2025 announced that it secured a binding US$22 million contract to supply Remote Weapon Systems to a prime contractor for integration onto a major U.S. Army ground combat platform.
On 15 December 2025, the company announced that it entered into a binding conditional agreement with a customer in the Republic of Korea with a total contract value of US$80 million.
The Remote Weapon Systems are being supplied in a ground-to-ground configuration and will be manufactured at the Canberra facility across 2026 and 2027.
The company also confirmed the completion of its acquisition of the UK based interceptor business from MARSS Group for €5.5 million and as of 30 June 2025, the group held $130.3 million in cash which provides flexibility for future growth.
(Source: Company Reports)
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