Defence stocks GRSE, MIDHANI, BEML, BDL, Paras dip up to 6%; here's why

Defence stocks fall after the US President Donald Trump announced a "complete and total" ceasefire between Israel and Iran, signalling a potential end to the escalating conflict in West Asia.

Defence shares price action today

 

Shares of public sector undertaking (PSU) defence companies as well as private sector were down up to 6 per cent on the National Stock Exchange (NSE) in Tuesday’s intra-day trade on profit booking after the ceasefire announcement between Israel and Iran.

 

Garden Reach Shipbuilders & Engineers (GRSE), Mishra Dhatu Nigam (MIDHANI), BEML, Paras Defence and Space Technologies, Astra Microwave Products, Bharat Dynamics (BDL), Hindustan Aeronautics (HAL), Cochin Shipyard, Mazagon Dock Shipbuilders, Ideaforge Technology, Apollo Micro Systems and ZEN Technologies declined between 2 per cent to 6 per cent.

 

At 09:41 AM; the Nifty India Defence index, the top loser among sectoral indices, was down 2 per cent, as compared to 0.72 per cent rise in the Nifty 50. 

 

Since April 7, the Nifty India Defence index had zoomed 52 per cent, as against 12.7 per cent rise in the benchmark index till Monday.  Track LIVE Stock Market Updates 

Why did defence stocks fall today?

 

The dramatic developments in West Asia culminating in President Trump’s announcement of ceasefire indicate that the worst of the conflict is over. 

 

The US President Donald Trump announced a “complete and total” ceasefire between Israel and Iran, signalling a potential end to the near 2-week escalating conflict in West Asia. The ceasefire, brokered by Washington DC, will be phased in over 24 hours and aims to officially conclude what Trump labelled “THE 12 DAY WAR”.

 

The surprise announcement was made via Trump’s Truth Social platform late Monday night, shortly after Iran launched missile strikes on the US military base in Qatar in retaliation to American airstrikes on three Iranian nuclear sites. The US reported no casualties. CLICK HERE FOR FULL REPORT

   

InCred Equities view on aerospace & defence sector

 

India’s defence landscape is poised for transformative growth, underpinned by a record ₹6.81 trillion allocation in 2025‐26 - 13 per cent of total central expenditure - and a decade‐long compound annual spending increase of 9 per cent. 

 

A decisive 13 per cent boost in capital outlay further marks the government’s commitment to cutting‐edge modernization, funding advanced arms, naval vessels, aircraft, R&D, and critical border infrastructure. This dual thrust of robust budgeting and elevated capital investment not only secures operational readiness but also catalyzes indigenous innovation and strategic self‐reliance, charting a clear trajectory towards technological transformation and sustained sectoral growth.

 

However, due to escalating geopolitical tensions, particularly in the Indo-Pacific region and along India’s borders with China and Pakistan, analysts at InCred Equities project the budget to rise by ~10 per cent YoY in FY27F, reaching around ~₹7.49 trillion.

 

Capital procurement from domestic sources has increased from 54 per cent in FY18–19 to a robust 75 per cent (approximately ₹1 trillion) in FY23–24, a benchmark sustained in FY24–25 (₹1.05 trillion) and FY25–26 (₹1.11 trillion). This focus on domestic procurement has significantly empowered domestic players, enabling substantial growth for both defence public sector undertakings (DPSUs) and private companies, the brokerage firm said.