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Time of India
07-07-2025
- Business
- 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)
Economic Times
07-07-2025
- Business
- Economic Times
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. ADVERTISEMENT 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. '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. ADVERTISEMENT 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%. ADVERTISEMENT 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% 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. ADVERTISEMENT 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. ADVERTISEMENT 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)
Time of India
03-07-2025
- Business
- Time of India
Defence outperforms sectoral indices; surges 34.82% in six months, far ahead of Nifty - is the rally sustainable?
India's defence sector has taken pole position among all sectoral indices, delivering a 34.82% return over the past six months — a performance that stands out against Nifty's 5.49% gain and declines in IT and pharma. While most sectors struggled or stayed flat, defence stocks rallied on the back of strong order visibility, execution, and policy support. Leading the charge were public sector undertakings (PSUs) such as Hindustan Aeronautics (HAL), Bharat Electronics (BEL), and Bharat Dynamics (BDL). These companies have benefitted from government procurement momentum and operational improvements, translating into margin gains and earnings growth. According to ET, analysts credit the sector's outperformance to improved investor visibility into long-term contracts, healthy cash flows, and a broader re-rating of PSU stocks across segments. Here's how key sectors performed in the first half of calendar year 2025: Here's how key sectors performed in the first half of calendar year 2025: Sector Performance (%) Defence 34.8 Financial Services 13.2 Bank Nifty 11.1 PSU Bank 9.2 Infra 9.1 Nifty 5.5 PSE 3.9 Mid-cap 100 2.8 Energy 2.4 Small-Cap 100 0.0 Auto -0.6 FMCG -4.8 Realty -6.2 Pharma -6.4 IT -12.2 Source: ET, H1 CY25 performance The government's push for self-reliance under Make in India and Atmanirbhar Bharat has further lifted sentiment around defence manufacturing. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Pernas e tornozelos inchados? Descubra o que pode ajudar a drenar agora aartedoherbalismo Undo 'PSU defence companies like HAL, BEL, and BDL have reported healthy order books, margin expansion, and earnings growth,' said Sagar Shinde, VP of Research at Fisdom. 'Additionally, heightened geopolitical tensions have further increased interest in the sector, both domestically and globally,' he added. Defence fund returns hit 39% as retail bets rise The stock rally has powered sharp gains for mutual funds with exposure to defence. Over the past three months, returns from sectoral schemes have reached as high as 39%, with the category average at 36.98%. Motilal Oswal's Nifty India Defence ETF delivered a 38.58% return, followed closely by Groww's ETF and ETF FoF products at 38.48% and 38.32%, respectively. The HDFC Defence Fund, the only actively managed offering in the category, gained 30.04%. Much of the inflow has come on the back of themes like indigenisation, military modernisation, and defence exports. But experts caution that such momentum-driven bets carry risks for most investors. '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,' said Hrishikesh Palve of Anand Rathi Wealth. 'Chasing current momentum in such sectors is not advisable,' he added. Export deals and NATO boost lift outlook On the international front, a recent NATO announcement on long-term defence spending increases has opened new opportunities for Indian exporters. With several firms now integrated into global defence supply chains, analysts expect further traction in overseas orders. India's $5 billion defence export target by 2025 has added to the optimism. Deals with countries across Africa, Southeast Asia, and the Middle East have widened the sector's global footprint in recent months. Analysts flag possible pause after steep run Despite its strong showing, the sector may be nearing a consolidation phase as valuations stretch. '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,' he added. The outlook for defence remains closely tied to policy direction, execution strength, and international demand. Whether it can sustain leadership across sectors will depend on how companies capitalise on both domestic initiatives and global defence trends. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
03-07-2025
- Business
- Time of India
Defence outshines all sectors with 35% rally in 2025: What's driving the surge and will it last?
India's defence sector has emerged as the strongest performer over the past six months, delivering a remarkable 34.82% return — far ahead of all other sectoral indices. While broader market benchmarks like the Nifty gained 5.49% during the same period, and sectors such as IT (-12.18%) and pharma (-6.43%) saw declines, defence has stood out as a clear winner. A large part of this rally has been driven by the strong performance of defence-focused public sector undertakings (PSUs) like Hindustan Aeronautics (HAL), Bharat Electronics (BEL), and Bharat Dynamics (BDL). These companies have reported healthy order books, consistent execution, and improved margins, supported by steady procurement from the Indian government. Analysts attribute this outperformance to increased investor confidence, driven by greater visibility into long-term orders, strong cash flows, and the ongoing re-rating of PSUs across sectors. With the Indian government prioritising indigenous defence manufacturing under initiatives like Make in India and Atmanirbhar Bharat, the outlook for domestic defence players remains positive. According to Sagar Shinde, VP of Research at Fisdom, '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.' Mutual fund inflows reflect rising retail interest The strong market performance in defence stocks has translated into impressive returns for mutual funds focused on the sector — particularly over the last three months. During this period, defence-based mutual fund schemes have delivered returns of up to 39%, with the category average standing at 36.98%. The Motilal Oswal Nifty India Defence ETF led the pack with a 38.58% gain, followed closely by Groww Nifty India Defence ETF FoF and Groww Nifty India Defence ETF, which returned 38.32% and 38.48%, respectively. The HDFC Defence Fund, the only actively managed scheme in the category, posted a return of 30.04%. The surge in returns reflects growing investor interest in the sector, aided by themes like self-reliance, modernisation, and defence exports . However, financial advisors have warned that sectoral funds can be volatile and are best suited for investors with a high-risk appetite and a long investment horizon. Hrishikesh Palve of Anand Rathi Wealth cautioned, '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.' Global momentum The sector has also gained from developments on the global front. A recent NATO announcement to raise defence spending significantly over the next decade has been viewed as a major export opportunity for Indian manufacturers. Indian defence firms, many of which are now part of global supply chains, are expected to benefit as countries diversify their defence procurement sources. India's target of reaching $5 billion in defence exports by 2025 has also improved long-term sentiment. Recent bilateral defence deals with countries in Africa, Southeast Asia, and the Middle East point to a growing international footprint. Outlook While the sector's rally is underpinned by strong fundamentals, analysts warn that valuations are stretched and the market may enter 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, the defence sector stands at the intersection of government policy, geopolitical developments, and investor optimism. Whether it can sustain this pace of growth will depend on continued execution and the ability to capitalise on both domestic and global opportunities. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times) ETMarkets WhatsApp channel )
Economic Times
13-05-2025
- Business
- Economic Times
Largecap mutual funds gain investor interest, inflows surge by 8% in April
Amid market volatility, large-cap mutual funds experienced an 8% surge in April inflows, reaching ₹2,671 crore, driven by investor preference for stability. Amid the heightened market volatility and global uncertainties, investors appear to be favouring the stability and resilience offered by largecap mutual funds as the category witnessed a surge of 8% in monthly category received total inflows of Rs 2,671 crore in April against an inflow of Rs 2,479 crore in March, by becoming the only category among diversified mutual funds to witness surge in inflows. On a yearly basis, the category saw a jump of 647% in the inflows, the highest among all diversified equity categories. The category received an inflow of Rs 357 crore in April 2024. Apart from diversified mutual fund categories, sectoral and thematic funds saw a jump of 1,076% in the monthly inflows. Also Read | India-Pakistan Tensions: How should mutual fund investors respond to navigate geopolitical risk? The experts attribute this month-on-month jump to safety and stability which large cap mutual funds provide in the volatile market as their higher liquidity and lower volatility make them a preferred choice when investors become cautious. 'This is mainly driven by a shift in investor sentiment towards safety and stability. Large-cap funds, which focus on blue-chip companies, are perceived as more resilient during volatile or uncertain market conditions. Their higher liquidity and lower volatility make them a preferred choice when investors become cautious,' said Hrishikesh Palve, Director, Anand Rathi Wealth. Another expert says that the large cap funds are attracting inflows due to their relative stability, better corporate earnings, and more attractive valuations compared to mid and small-caps. 'These factors, along with global uncertainties, have led investors to prefer the safety and visibility offered by large-cap companies, while other diversified categories have seen a month-on-month moderation in flows amid valuation concerns and profit booking,' said Sagar Shinde, VP of Research at a monthly basis, the other diversified equity mutual funds saw drops ranging between 1% to 151%. ELSS or tax-saving mutual funds saw a drop of 151% as the category witnessed an outflow of Rs 372 crore in April against an inflow of Rs 735 crore in March. Flexi cap funds, the category which received the highest inflow in April of Rs 5,541 crore, saw a decline of 1% on monthly basis from an inflow of Rs 5,615 crore in March. Also Read | HDFC Defence Fund increases stake in HAL, Solar Industries, and 4 other stocks in April A deep dive into the data of inflows by Association of Mutual Funds in India (AMFI) showed that in March, large cap funds was the only category among diversified mutual fund categories to see a drop in monthly responses. In March, the inflows dropped by 13% from an inflow of Rs 2,866 crore in February to Rs 2,479 crore in firmly believes that this 8% month on month surge likely reflects a shift in sentiment toward safer, more predictable equity segments and he also recommended that in the current market environment, increasing allocation to large caps can be a prudent move, especially for conservative investors or those looking to rebalance portfolios after strong gains in riskier the category witnesses a surge in inflows, Palve believes that in the times of heightened market volatility, it is very common for investors to move towards stable categories such as large-cap, as these categories offer stability & reduce overall portfolio volatility during turbulent also recommends that it is recommended for investors to build a strategy-based portfolio by diversifying the portfolio across the categories, such as market-cap-based funds and strategy-based funds, such as focused and value funds, as these will help to maintain stability and reduce overall portfolio volatility and additionally, it is recommended to follow a market cap mix of 55:22:23 across large, mid, and small caps. In April, the large cap funds offered an average return of 4.35% with Invesco India Largecap Fund being the topper which delivered 6.30% return in the same period. Samco Large Cap Fund lost the most of around 0.51% in the same period. On the other hand, mid cap and small cap funds gave an average return of around 3.81% and 2.01% respectively in April. In March, mid cap funds topped the average return chart among these three categories and gave an average return of 7.74%, followed by small cap funds which gave an average return of 7.66% and then large cap funds which gave an average return of 6.73% in the same period. Also Read | Defence ETFs gain up to 7% in two weeks amid India-Pakistan tensions With the category attracting more inflows, Shinde is of the opinion that while some of the inflows may be driven by near-term macro uncertainty, the trend could sustain if market volatility persists and the outlook for large-cap funds remains constructive, backed by steady earnings growth and valuation comfort relative to mid and looking at the performance and inflows, Palve is of the opinion that the shift is likely to be temporary, and it is mainly driven by a series of global uncertainties such as U.S. elections, tariff tensions, Russia-Ukraine war escalations, and Indo-Pak geopolitical tensions and historically, markets have shown resilience, with long-term performance driven more by corporate earnings and valuations than by short-term geopolitical shocks.'Going forward, we are seeing the large-cap category grow at 12 to 13% CAGR. Currently, the valuations are reasonably placed with negative froth; however, it is not recommended to invest solely in a single market cap or category. Investors should diversify across the market caps with a market cap mix of 55:22:23 across large, mid, and small caps,' he funds invest at least 80% of their assets in a large-cap company which is ranked from 1st to 100th on the Indian stock exchanges in terms of market capitalisation, with the flexibility to invest the balance 20% in other companies as per the discretion of the fund manager. If you are looking for recommendations, see: Best large cap mutual funds to invest in May 2025 (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ along with your age, risk profile, and Twitter handle.
