Latest news with #MotilalOswalNiftyIndiaDefenceETF
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)
Economic Times
03-07-2025
- Business
- Economic Times
Defence outshines all sectors with 35% rally in 2025: What's driving the surge and will it last?
Live Events Mutual fund inflows reflect rising retail interest Global momentum Outlook (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel 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 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 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.'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 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.'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 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 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.: 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 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
28-05-2025
- Business
- Economic Times
Defence sector based mutual funds rally up to 60% in 3 months. Will the momentum continue?
Defence sector based mutual funds have rallied upto 60% in the last three months. There are around six funds in the category including active and passive and gave an average return of 57.70% in the same period. Three schemes in the category gave over 60% return. Motilal Oswal Nifty India Defence ETF offered the highest return of around 60.49% in the last three months, followed by Motilal Oswal Nifty India Defence Index Fund which gave 60.23% return in the same period. Also Read | Defence ETFs gain 17% in one week. Should you add to your portfolio? Groww Nifty India Defence ETF and Aditya Birla SL Nifty India Defence Index Fund gave 60.12% and 59.96% returns respectively in the similar time period. Groww Nifty India Defence ETF FOF gave 59.45% return in the mentioned time period. HDFC Defence Fund, the only active fund based on the defence sector, delivered 45.93% return in the mentioned period. Experts attribute this surge to a combination of strong earnings delivery by the sector constituents, policy momentum with increased capital allocation by the Indian government and trigger coming from actual use case of India's Defence Capability in recent India-Pakistan faceoff at borders.'Key holdings in defence index funds reported strong earnings growth. The Indian defence budget allocation for FY25 has maintained a sharp focus on indigenization. Capital outlay of Rs 1.72 lakh crore continues to support new orders. Defence exports reached an all-time high of Rs 21,083 crore in FY24 (up 12% YoY), reflecting rising global demand for Indian defense manufacturing. This surge in earnings, coupled with a policy push and a favorable geopolitical backdrop, led to substantial price rerating and fund outperformance,' said Atul Shinghal, Founder and CEO, Scripbox. In addition to these factors, another expert adds that Defence funds have benefited from the recent surge in prices of defence stocks. Defence stocks have been on the rise in recent months after they were hit badly during the sell-off earlier this year. 'Many countries around the world, including India are ramping up their military capabilities, leading to increased defence spending. In India, this trend was further strengthened post the Operation Sindoor, as the Indian government plans to further improve our defence capabilities,' said Nilesh D Naik, Head of Business – Investments, the last six months, defence based passive funds returned 34% with Motilal Oswal Nifty India Defence ETF being the topper as the fund delivered 34.22% return in the last six months, followed by Motilal Oswal Nifty India Defence Index Fund which gained 33.73% in the same Nifty India Defence ETF FOF gave 33.35% in the last six months. HDFC Defence Fund, the only active fund based on this sector, gave 15.86% return in the same period. Also Read | HDFC Defence Fund increases stake in HAL, Solar Industries, and 4 other stocks in April Despite seeing the historical stellar performance by these funds, experts don't recommend investing in these sectoral funds. Shinghal of Scripbox mentions that despite strong sector fundamentals, current valuations are stretched as the trailing P/E ratio of the Motilal Oswal Nifty India Defense Index stands at a steep 61.35x, while the P/B ratio is 13.22x—significantly higher than broader market averages. which in turn indicates that the future growth might be already priced further adds that the Sharpe Ratio is negative (-0.07), indicating poor risk-adjusted return over recent volatility, despite high absolute returns and the index has 77.5% exposure to mid and small caps, which increases vulnerability to sharp corrections during risk-off sentiment willing to allocate or have existing investments in these funds can follow the strategy Shinghal shared. He mentioned that existing investors should hold and consider profit booking in a staggered manner, new investors should avoid fresh lump-sum allocations and tactical SIPs may be considered only on 10–15% corrections, and lastly the total allocation to defence sector should be between 2-4% and should not exceed 4% of total equity the other hand, Naik advices that thematic funds such as this are typically meant for seasoned investors who have their core portfolio in place and who want to take a tactical bet based on their views on a specific sector or theme. 'With recent rally in defence stocks, many of them have now recovered significantly and are trading at close to their all time highs. While the long term defence sector story seems strong, investors should be extremely cautious while investing in such funds post this rally, given the current valuations,' he earlier analysed that in a week's time, defence sector based ETFs have gained upto 17% in one week's time. The focus on defence stocks came after reports that the Modi government has called a meeting with defence makers post the recent India-Pakistan faceoff at the stellar performance of defence funds, Shinghal comments on the outlook for the sector and mentions that while India's long-term defense growth story is intact, current valuations do not offer a favorable risk-reward for fresh allocations and investors are advised to retain moderate exposure (up to 4%), book profits where returns have exceeded expectations, and re-enter during valuation corrections or policy-driven should always choose a scheme based on risk appetite, investment horizon, and goals. (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@ alongwith your age, risk profile, and Twitter handle.
