BEML, HAL, MIDHANI slip up to 4%; why defence stocks under pressure?

At 12:03 PM on Monday; NSE India Defence index was the top loser among sectoral indices, down 2 per cent, as compared to 0.08 per cent rise in the Nifty 50.

Defence companies shares today

 

Shares of defence companies were under pressure, and fell up to 4 per cent on the National Stock Exchange (NSE) in Monday’s intra-day trade on profit booking following the tragic crash accident of the Light Combat Aircraft (LCA) Tejas Mk 1 reported on November 21, at the Dubai Air Show.

 

The stock price of Hindustan Aeronautics (HAL) slipped 4 per cent to ₹4,405 in intra-day trade. In the past four trading days, HAL’s market price has declined by 8 per cent. 

 

Meanwhile, Mishra Dhatu Nigam (MIDHANI), BEML, Astra Micro Systems, Dynamatic Technologies, Garden Reach Shipbuilding (GRSE), Datta Patterns (India), Zen Technologies and Paras Defence & Space Technologies were the other stocks from the defence sector down in the range of 3 per cent to 4 per cent.

 

 

At 12:03 PM; the NSE India Defence index was the top loser among sectoral indices down 2 per cent, as compared to 0.08 per cent rise in the Nifty 50. In the past two trading days, the defence index has dipped 4 per cent, as against 0.4 per cent decline in the benchmark Nifty.

 

However, since August 29, the NSE Index Defence index has outperformed the market, surging 8 per cent. In comparison, the Nifty 50 was up 6.5 per cent during the same period. 

 

Why are defence stocks under pressure today?

 

A Tejas fighter jet built by HAL for the Indian Air Force met with a mishap near Al Maktoum International Airport during a demonstration at the Dubai Air Show, 2025. According to initial experts’ assessment, the mishap was caused by a Negative-G manoeuvre. A Court of Inquiry by the IAF has been constituted to determine the exact cause of the accident.

 

While HAL may see a sentimental decline in the stock due to the crash, analysts remain positive on the stock. 

 

Analysts at Elara Capital retained 'BUY' rating on HAL with a target price of ₹5,680 on 38x September 2027 P/E, as the brokerage firm does not expect any major financial impact on the current orderbook, inflows, and execution. India’s aircraft pipeline remains huge at ₹3 trillion, due to reduction of active fighter aircraft squadrons to 29 vs the required 42. HAL remains the main player in aircraft manufacturing in India and is set to remain a key beneficiary. The brokerage firm maintained its position on HAL as a preferred play in India’s defence industry with long-term inflows visibility.

 

Analysts do not expect news of the crash to impact the 83 + 97 orders for LCA Tejas Mk1A and its delivery schedule. “We do not think Tejas Mk 1 aircraft will be grounded as the incident did not occur in mission mode and instead took place at an airshow (unlike the grounding of HAL’s ALH helicopter due to frequent crashes in missions). However, the incident of the second Tejas crashing in the past two years may delay exports,” the brokerage firm said on the development.

 

Meanwhile, in the wake of this event, Choice Equity Broking said it recognises that sentiment around exports may see a temporary setback, the brokerage firm thinks the near-to-medium-term focus continues to be on domestic deliveries — particularly the ongoing production ramp-up for Tejas Mk1A. By the time export engagements scale up meaningfully, analysts expect the current situation to normalise and investor concerns to subside. 

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