Nifty India Defence index slips 5%; GRSE, BDL tank 8%, HAL hits 52-week low

Cochin Shipyard, GRSE, BDL, BEML, Paras Defence, Mazagon Dock Shipbuilders and Unimech Aerospace have plunged between 40% and 51% from their respective 52-week highs.

Nifty India Defence index today

 

Shares of defence companies were under pressure with the Nifty India Defence index falling 5 per cent to 7,349.20 on the National Stock Exchange (NSE) in Monday’s intra-day trade amid a sharp sell-off in the equity market.

 

Garden Reach Shipbuilders & Engineers (GRSE), Bharat Dynamics (BDL) and BEML tanked 8 per cent each. Mishra Dhatu Nigam, Data Patterns India, Paras Defence and Space Technologies, Cochin Shipyard, Mazagon Dock Shipbuilders and MTAR Technologies were down in the range of 6 per cent to 7 per cent.

 

Meanwhile, the share price of Hindustan Aeronautics (HAL) (down 5 per cent at ₹3,510) and Unimech Aerospace and Manufacturing (down 4 per cent at ₹ 761.10) have hit their respective 52-week lows in intra-day trade.

 

At 02:15 PM; Nifty India Defence index was down 4.3 per cent, as compared to 2 per cent decline in the Nifty 50.

 

Why are defence shares under pressure?

 

Share price of HAL has tanked 30 per cent from its 52-week high of ₹5,166 touched on May 16, 2025.

 

Cochin Shipyard, GRSE, BDL, BEML, Paras Defence and Space Technologies, Mazagon Dock Shipbuilders and Unimech Aerospace and Manufacturing market prices have plunged between 40 per cent and 51 per cent from their respective 52-week highs.

 

HAL derives majority of its revenue from the Indian defense sector. Accordingly, a continuous flow of orders from the defence sector, which in turn depends on the defense budget, is critical for the company’s prospects.

 

Apart from licensed production, HAL focused on developing indigenous aircraft and helicopters, which can be translated into production orders and shall provide revenue visibility for the next 5-10 years. The company has been making efforts towards improving exports and aim to secure export orders with its existing platforms. However, quantum of exports continues to remain low, according to CARE Ratings Limited (CareEdge Ratings).

 

The rating agency believes that HAL will continue to benefit from its strategic importance to the Indian defence forces, resulting in maintaining its leadership position in the Indian Aerospace and Defence industry supported by long track record of operations, high entry barriers, and maintaining its highly comfortable financial risk profile.

 

Analysts at Choice Institutional Equities reiterate a constructive stance on HAL despite near-term supply constraints relating to Tejas Mk-1A engine deliveries. 

 

“Importantly, our investment thesis is not contingent on a single platform. Approx. 54 per cent of HAL’s order book is anchored in diversified and execution-visible segments including Su-30MKI upgrades, engine mfg., MRO and others. This portion alone translates to nearly ~4.3x FY25 revenue, providing substantial earnings visibility and mitigating platform-specific risk,” the brokerage firm said in the company update. 

 

Analysts view the recent news regarding HAL’s potential exclusion from the Advanced Medium Combat Aircraft (AMCA) program as a material negative for its long-term growth outlook.  ==================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.