Defence index hits new high; Midhani, HAL, BEML rally up to 5%; here's why

Nifty India Defence index hit a new high of 9,912.75, gaining 1% in Monday's intra-day deals. The index quoted higher for the fourth straight trading day.

Defence shares price movement

 

Defence shares, both private and public sector, continued their upward movement, with the Nifty India Defence index hitting a new high of 9,912.75, gaining 1% on the National Stock Exchange (NSE) in Monday’s intra-day deals. The defence index quoted higher for the fourth straight trading day, surging 3 per cent during the period. On August 13, 2026, the index surpassed its previous high of 9,784.60 touched on June 23, 2026.

 

At 10:20 AM, the Nifty India Defence index was up 0.47 per cent at 9,858.25, compared to a 0.42 per cent decline in the Nifty 50.

 

 

Among individual stocks in the defence index, AXISCADES Technologies rallied 6 per cent to ₹1,568.10 on the NSE in intra-day deals.

 

Share price of Mishra Dhatu Nigam (MIDHANI) surged 5 per cent to ₹437.40. In the past three trading days, the stock soared 8 per cent. On August 13, 2026, it hit a 52-week high of ₹456.60 after the company secured S400 approval from GE Aerospace. 

 

Hindustan Aeronautics (HAL), MTAR Technologies, Bharat Dynamics (BDL), Mazagon Dock Shipbuilders, Data Patterns (India), Zen Technologies, Bharat Forge, Solar Industries and BEML were up 2 per cent each on the NSE in Monday's intra-day deals.

 

Why are defence stocks outperforming the market?

 

Reliance Industries and Rolls-Royce announced a strategic intent to jointly design, develop, manufacture and deliver a sovereign combat engine for India’s AMCA (Advanced Medium Combat Aircraft) programme. The companies plan to explore an Aerospace Gas Turbine Complex in India, which would build end-to-end capabilities across engine design, development, manufacturing, testing, production and lifecycle support. The partnership could significantly accelerate localisation of advanced aero-engine technology and strengthen India’s domestic propulsion ecosystem.

 

According to ICICI Securities, the proposed partnership is a significant positive for India’s aerospace supply chain as localisation of a fighter engine would require development of a much broader ecosystem for precision machining, forgings, castings, superalloys, coatings, seals and other critical engine components. Rolls-Royce already has an established Indian supply chain and indicated plans to at least double sourcing from India by 2030. 

 

Among domestic companies, the brokerage firm believes companies like Azad Engineering (existing Rolls-Royce relationship, with long-term contracts to supply critical components); HAL (manufacturer of critical RR engine components), Bharat Forge (critical forged and machined RR aero-engine components) and Tata Advanced Systems (TASL) are well placed to capture large opportunity. While companies like MIDHANI, and PTC Industries could also emerge as potential beneficiaries as the indigenous engine ecosystem scales, given their capabilities in aerospace-grade materials, precision components and complex manufacturing, the brokerage firm said.

 

ICICI Securities view on BDL, HAL

 

Defence stocks have been outperforming the broader market, and analysts at ICICI Securities expect HAL to continue its leadership within the sector. The stock recently closed at its highest level since September, indicating strong momentum and sustained buying interest. 

 

On the derivatives front, aggressive long build-up has been witnessed in the August futures, with open interest rising by nearly 30 per cent since the start of the series. From the options perspective, the second-highest Call base at ₹5,000 witnessed substantial unwinding, reducing resistance at higher levels. Simultaneously, noteworthy Put writing across both ATM (At-the-Money) and OTM (Out-of-the-Money) strikes indicates strong support and suggests that downside is likely to remain limited. Hence, the brokerage firm said they expect HAL to continue it’s up move towards ₹5,400 levels.

 

Meanwhile, BDL’s execution improved significantly during Q1FY27, possibly led by ease in supply chain constraints or increasing indigenization levels of key platforms. With the current order book at ₹26,500 crore (~9.6x trailing twelve month revenue), BDL has strong revenue visibility over the medium term, while the pipeline remains robust across Quick Reaction Surface-to-Air Missile (QRSAM), Varunastra, Akash-NG, Helina and other missile programmes. Going ahead, ICICI Securities believes that timely execution of the large backlog along with further improvement in margins would remain the key monitorables.

 

Given the good order inflows probability and pick-up in execution, analysts at ICICI Securities raised target multiple to 45x to arrive at a revised target price of ₹1,530 (vs. ₹1,360). The brokerage maintains an 'ADD' rating on BDL.  Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers' discretion is advised.