Defence, rail shares under pressure; HAL, Siemens, ABB down up to 7%

Defence, railways stocks in focus: In the past one month, most of these stocks had hit their respective record highs

Defence, railway stocks ahead of Budget 2024: Shares of defence and railway related companies were under heavy pressure on Thursday, falling up to 7 per cent in the intraday trade on the BSE. The decline in share prices came amid profit booking in an otherwise strong market ahead of the Union Budget 2024-25.

CG Power and Industrial Solutions, Hindustan Aeronautics (HAL), Siemens, ABB India, Titagarh Rail Systems, Rail Vikas Nigam (RVNL), and RailTel Corporation of India were among the major defence and rail-related stocks, which were down between 5 per cent and 7 per cent. In the past one month, most of these stocks hit their respective record highs and had outperformed the market on strong business outlook. In comparison, the BSE Sensex was up 0.66 per cent or 533 points at 81,249 at 01:57 PM.

With the National Democratic Alliance (NDA) coming back to power in the 2024 Lok Sabha polls, Finance Minister Nirmala Sitharaman will present the Union Budget 2024 on July 23.

With a focus on infrastructure development, the Government has consistently prioritised the growth of the Railways sector, drawing considerable investments. Consequently, India has one of the largest and most rapidly advancing rail networks globally. Indian Railways' National Rail Plan (NRP) for India 2030 aims to create a 'Future Ready' Railway system by 2030.

In the past year, Indian Railways has made steady strides in its modernisation and transformation efforts, experiencing notable momentum in capital expenditure allocation, track laying, electrification, station construction, and redevelopment projects, introduction of new Vande Bharat Trains, implementation of Kavach initiatives, and other infrastructure endeavours. The gross budgetary outlay for FY25 was set at Rs 2.5 trillion in the interim Budget as against Rs 2.4 trillion for the year FY24.

Meanwhile, in FY 2024, the defence sector in India reached a key milestone when it was valued at over Rs 1 trillion for the first time. As the sector transformed from being a net importer to a net exporter, it recorded tremendous growth.

There has been a notable increase in demand for Indian defence products during the year. The Defence Research and Development Organisation’s (DRDO) Technology Development Fund (TDF) has empowered the Ministry of Small, Micro and Medium Enterprises (MSME) and startups to develop indigenous capabilities leveraging cutting-edge defence technologies.

With 164 technologies currently undergoing the process of indigenisation, a substantial amount of $30.8 million has been sanctioned. This initiative engaged 1,886 professionals and 5,270 companies in advancing defence technology.

With continued government support, strategic partnerships, and a relentless focus on technological advancements, India is poised to achieve self-reliance and emerge as a major force in defence innovation and production, Solar Industries had said in its FY24 annual report.