Defence stocks plunge on profit booking; Paras Defence, GRSE, BEL, Bharat Dynamics, among top losers
Paras Defence and Space Technologies share price emerged as the top laggard, falling 7.8%. Other major losers included Garden Reach Shipbuilders & Engineers, Astra Microwave Products, Bharat Electronics, Zen Technologies, and Bharat Dynamics, each shedding between 1% and 2%.
On the flip side, DCX Systems, Unimech Aerospace and Manufacturing, BEML, Cyient DLM and Hindustan Aeronautics (HAL) were the only gainers in the Nifty India Defence index.
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Business Standard
4 days ago
- Business Standard
Nifty India Defence index slips over 2%; BDL, GRSE, Solar down up to 5%
Defence companies share prices fall Shares of defence companies public as well as private were under pressure, with Nifty India Defence index falling over 2 per cent on the National Stock Exchange (NSE) in Thursday's intra-day trade. Bharat Dynamic (BDL) slipped 5 per cent to ₹1,883.40 on the NSE in intra-day trade. With today's fall, the stock has corrected 10 per cent from its record high level of ₹2,096.60 touched on May 30, 2025. Astra Microwave Products, Garden Reach Shipbuilders & Engineers (GRSE), Solar Industries, Data Patterns (India), Zen Technologies, Paras Defence and Space Technologies, Hindustan Aeronautics, BEML and Bharat Electronics (BEL) were down in the range of 2 per cent to 4 per cent. At 01:44 PM; Nifty India Defence index, the top loser among sectoral indices, was down 2.3 per cent, as compared to 0.41 per cent decline in the Nifty 50. In the past one month, the Defence index has underperformed the market by falling 3.7 per cent, as against 1 per cent rise in the benchmark index. However, in the past three months, Nifty India Defence index has zoomed 42 per cent, as compared to 13.5 per cent rally in Nifty 50. Defence Sector Outlook The Indian defence sector is set to grow rapidly, driven by new technologies like artificial intelligence, robotic and autonomous systems that are improving defence capabilities. Additionally, India has proposed a defense budget of ₹6.81 trillion for 2025-26, reflecting a 9.5 per cent increase from the previous year. Increasing regional tensions are pushing India to focus more on securing its borders and strengthening maritime defence. Defence exports are expected to rise further as India positions itself as a reliable global supplier. Together, these factors are making the sector more competitive and critical to the country's security goals. The Indian government's 'Make in India' and 'Atmanirbhar Bharat' initiatives have emphasised self-reliance in defence manufacturing. Measures such as reserving specific defence items for domestic suppliers and easing FDI norms have significantly boosted local production. Partnerships between government agencies and private enterprises have accelerated progress in defence technologies, including weaponry, ammunition, aerospace systems and electronics, thereby strengthening domestic manufacturing capabilities, Solar Industries said in its FY25 annual report. Meanwhile, analysts expect defence budgets to grow due to various geopolitical conflicts and border tensions. The private defence industry is poised to benefit significantly from NATO's estimated $1.4 trillion defence spending in CY24-35, driven by Europe's rearmament efforts, increased private sector participation in tenders, proven battle-tested capabilities, and a sustained focus on R&D and IP-led manufacturing. Defence companies continued to benefit from the government's push on the indigenization while the geopolitical events during the March quarter led to Emergency Procurement from government which will lead to additional orders for the defence companies, analysts at PL Capital said. Brokerages view on Bharat Dynamics (BDL) Motilal Oswal Financial Services initiated coverage on BDL with a Neutral rating and a target price of ₹ 1,900 based on 42x Sep'27E P/E. The brokerage firm said it liked the business model of BDL and its ability to scale up its revenues and order book in current scenario, however, with fair valuations, analysts said they would look for lower price points to enter the stock. Key risks for the company include a decline or reprioritization of the Indian defense budget, termination of existing contracts or failure to succeed in tendering projects, changes in procurement rules and regulations of the MoD and the government, and supply-chain-related issues, the brokerage firm said. Elara Capital lowered its FY26E EPS by 17 per cent and FY27E EPS by 8 per cent on Akash missile execution from FY26 vs its assumption in FY25, lower-than-expected margin in FY25 with likely less scope for further improvement. The recent conflict highlighted product quality and combat mettle of BDL's product portfolio and would open various export opportunities. On July 1, company report, brokerage firm said it downgrade BDL to Sell from Accumulate, as the current price already factors in all the positives, 400-600bp lower EBITDA margin, and it has outperformed the Nifty in the past three months.
News18
4 days ago
- News18
Bharat Dynamics, HAL, GRSE Fall Up To 3%: What's Dragging Defence Stocks Today?
Reported By : Last Updated: July 10, 2025, 13:30 IST Defence Stocks Fall (Representational Photo) Why Are Defence Stocks Falling Today? Defence stocks declined in Thursday's trade, with the Nifty India Defence index slipping 1.4 per cent to around 8,739 in morning deals. The dip comes amid concerns around high valuations, easing geopolitical tensions, and profit-booking by investors after a strong rally earlier this year. Among the biggest losers, Bharat Dynamics Ltd (BDL) dropped over 3 per cent to Rs 1,917 after Motilal Oswal Financial Services initiated coverage with a 'Neutral' rating and a target price of Rs 1,900. The brokerage said that while it liked BDL's business model and growth potential, the current valuation appeared fair, prompting a more cautious stance. It added that revenue growth may rebound on the back of emergency procurement orders. Garden Reach Shipbuilders & Engineers (GRSE) also fell more than 3 per cent to Rs 2,890. The stock has already declined nearly 11 per cent over the past month, although it remains up 96 per cent over the last six months. Other defence counters including Data Patterns and Zen Technologies were down over 2 per cent, while HAL, Solar Industries, and Cochin Shipyard also fell more than 2 per cent. Mazagon Dock, BEL, and Paras Defence slipped between 0.6–1 per cent, while BEML traded with marginal losses. Concerns over elevated valuations The defence stocks have been in focus on hopes of higher order inflows, after the Indian military conducted targeted strikes against terrorist outfits in Pakistan under the codename 'Operation Sindoor' in May. As the geopolitical tensions between India and Pakistan eased, the escalations in Russia-Ukraine war continued to support the rally in defence stocks. The rise in tensions between Israel and Iran further boosted the stocks. However, analysts have mixed views regarding the space, with some flagging elevated valuations in these stocks. Easing geopolitical tensions The fall in the defence stocks also comes on the back of overall easing geopolitical tensions. US President Donald Trump had hinted at a possible Gaza ceasefire deal between Israel and Hamas this week. This comes amid Israeli Prime Minister Benjamin Netanyahu's visit to US. Earlier, the easing tensions between Iran and Israel after significant escalations in the oil-rich middle east, had pushed down the stocks. Swipe Left For Next Video View all Profit booking after record rally Defence stocks may have also dropped as investors booked profits at elevated levels. The stocks have seen significant surge in 2025 so far. BDL shares have gained over 69 per cent this year, while those of jumped 75 per cent. HAL shares are up 19 per cent while Mazagon Dock Shipbuilders shares are up nearly 46 per cent. Aparna Deb Aparna Deb is a Subeditor and writes for the business vertical of She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a... Read More Aparna Deb is a Subeditor and writes for the business vertical of She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a... Read More Stay updated with all the latest news on the Stock Market, including market trends, Sensex and Nifty updates, top gainers and losers, and expert analysis. Get real-time insights, financial reports, and investment strategies—only on News18. view comments News business » markets Bharat Dynamics, HAL, GRSE Fall Up To 3%: What's Dragging Defence Stocks Today? Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Time of India
7 days ago
- Time of India
Paras Defence, BEL, GRSE tumble up to 8% as profit booking drags defence stocks
India's defence stocks declined on Monday amid profit booking and subdued broader market sentiment, following a sustained rally that had positioned the sector among the market's top performers in recent months. The Nifty India Defence index dropped 1.5%, signalling a potential pause in momentum. Paras Defence and Space Technologies led the slide, tumbling 8%. Garden Reach Shipbuilders & Engineers fell 2.7%, Bharat Electronics and Bharat Dynamics each declined 2.5%, while Zen Technologies and Astra Microwave Products lost 2.2% and 2.3%, respectively. Meanwhile, a handful of stocks managed to stay in the green. DCX Systems , Unimech Aerospace and Manufacturing, BEML , Cyient DLM , and Hindustan Aeronautics ( HAL ) were the only gainers in the Nifty India Defence index. The sell-off comes on the heels of a stellar six-month performance, with the defence index returning 34.82%, far outpacing the Nifty's 5.49% gain. In comparison, sectors like IT and pharma declined 12.18% and 6.43%, respectively, over the same period. A large part of this rally was led by state-owned defence majors like HAL, BEL , and BDL, buoyed by robust order books, healthy execution, and margin expansion. Live Events 'PSU defence companies like HAL, BEL, and BDL have reported healthy order books, margin expansion, and earnings growth. Additionally, heightened geopolitical tensions have further increased interest in the sector, both domestically and globally,' said Sagar Shinde, VP of Research at Fisdom. Retail interest fuels fund performance The sector's performance has translated into strong returns for mutual funds focused on defence. Over the past three months, defence-themed funds have delivered returns of up to 39%, with the category average at 36.98%. The Motilal Oswal Nifty India Defence ETF gained 38.58%, followed closely by the Groww Nifty India Defence ETF FOF (38.32%) and Groww Nifty India Defence ETF (38.48%). The HDFC Defence Fund, the only actively managed fund in the category, posted a 30.04% return. Despite the gains, financial advisors urge caution. 'These sectors often experience cyclical performance and require timely entry and exit to capitalize on momentum, which can be difficult for most investors to navigate. Chasing current momentum in such sectors is not advisable,' said Hrishikesh Palve of Anand Rathi Wealth. Export potential and global cues support outlook Indian defence manufacturers are also drawing strength from the global backdrop. A recent NATO pledge to increase defence spending over the next decade is seen as an opportunity for Indian exporters, particularly those integrated into international supply chains. India's target of reaching Rs 5,000 crore in defence exports by 2025, backed by bilateral deals across Africa, Southeast Asia, and the Middle East, has further bolstered confidence in the sector's long-term potential. Valuations stretched, say analysts Still, some analysts warn that the sector may be entering a phase of consolidation. 'The optimism around future order wins, export growth, and policy tailwinds may already be priced in,' said Palve. 'A phase of mean reversion would not be surprising.' As of mid-2025, India's defence sector remains supported by strong fundamentals, policy push, and investor interest. But with valuations running high, Monday's decline may signal the start of a more cautious phase for this once-red-hot theme. Also read | Jane Street clampdown raises big questions for Sebi: Can the regulator stop another derivatives fraud? ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
