Why defence stocks are rising in trade today? Astra Microwave gets 'Buy'

Defence stocks rising today: Shares of defence companies were in an uptrend today with big names like Cochin Shipyard rising as much as 7 per cent in trade and Bharat Electronics Limited (BEL) surging nearly 3 per cent intraday. The Nifty Defence index, meanwhile, gained 1.6 per cent to 8,144, before paring gains to trade at 8,110 around 2:30 PM.  Around the same time, Unimech Aerospace was the top gainer as it climbed 4 per cent to ₹940, followed by Cochin Shipyard, Dynamatic Technologies and Astra Microwave -- up 3.5 per cent each at ₹1,521, ₹9,800 and ₹922, respectively. Cyient DLM gained 3 per cent to trade at ₹366.5. BEL, Bharat Forge, Paras Defence and Zen Technologies edged higher up to 2 per cent around the same. HAL shares also traded 0.50 per cent higher at ₹4,249.  Data patterns, Mishra Dhatu and Mazagon Dock Shipbuilders were the only three losers in the defence pack. 

Why defence stocks are rising 

Defence stocks are in a momentum on a day when French President Emmanuel Macron is visiting India, raising hopes that India could seal a deal to buy more fighter jets. Macron and PM Narendra Modi are scheduled to talk later in the day with focus on boosting ties in key sectors such as trade and defence.  According to a Bloomberg report, Macron is visiting India to court PM Modi and persuade him to buy French fighter jets. India is moving closer to purchasing 114 Rafale jets, with a committee chaired by the Defence Minister clearing the acquisition, though negotiations over price and local production remain.  The visit comes as both nations reassess their relationships with the US, with France becoming a key defence partner for India and offering joint production and technology transfers to support New Delhi's goal of strengthening its domestic arms industry. 

'Most defence stocks below RSI 50' 

Meanwhile, Anand James, chief market strategist, Geojit Investments, said that defence stocks have selectively come into the limelight lately, with companies involved in aircraft manufacturing, avionics, radar modules, UAVs, and related technologies gaining strength and attention since last week. Stocks such as HAL, BEL, and Bharat Forge have seen notable traction, with delivery volumes jumping nearly 100 per cent above their key averages over the past two days.  "The average RSI of most Nifty Defence Index constituents remains below 50, whereas the RSI levels of HAL, BEL, and Bharat Forge are around 60, indicating relative strength and momentum in these counters. The shipbuilding segment has shown early signs of a reversal, but it may require broader participation before momentum builds further," he said.  An RSI below 50 generally indicates a bearish sentiment, suggesting that a scrip is experiencing downward momentum.

Astra Microwave gets 'Buy' call 

Separately, analysts at ICICI Direct have maintained a 'Buy' rating on Astra Microwave Products for a target price of ₹1,120 as the company's focus remains on higher-margin contracts. The target price implies an upside of ₹225 per share or 25 per cent from the previous close of ₹894.45.  It said that the defence firm is strongly placed to capture a substantial share in defence & space electronics opportunity, considering its design, development and manufacturing capabilities.  The brokerage noted that the company has maintained its revenue growth guidance at 10-15 per cent for FY26E and aims to double its revenue to ₹2,000 crore by FY29E, implying a growth of 17 per cent CAGR over FY25-29E. Also, focus remains on healthy order intake and improving margins through better product mix.  The company's order backlog stood at ₹2,566 crore at the end of third quarter (Q3FY26) which provides healthy revenue visibility.      ===================================================

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