Defence shares in demand: HAL, Midhani, BDL, Mazagon Dock rally up to 6%

At 12:41 PM on Thursday, the Nifty India Defence index was the top gainer among thematic indices up 2.6% at 9,641.

Defence shares price movement

 

Defence shares, both private and public sector, were in demand, rallying up to 6 per cent on the National Stock Exchange (NSE) in Thursday’s intra-day deals.

 

Hindustan Aeronautics (HAL), Mishra Dhatu Nigam (MIDHANI), MTAR Technologies, Bharat Dynamics (BDL), Garden Reach Shipbuilders & Engineers (GRSE), Dynamatic Technologies, Cochin Shipyard, Mazagon Dock Shipbuilders, Dynamatic Technologies, Zen Technologies, Paras Defence and BEML were up 3 per cent to 6 per cent on the NSE in intra-day deals.

 

At 12:41 PM, the Nifty India Defence index was the top gainer among thematic indices up 2.6 per cent at 9,641.50, as compared to 0.08 per cent rise in the Nifty 50. Defence index hit a record high of 9,784.60 on June 23, 2026.

 

 

CareEdge Ratings view on India’s defence sector

 

According to CareEdge Ratings, the Indian defence industry is expected to grow from ₹1.78 trillion in FY26 to ₹3 trillion by FY29, at a compound annual growth rate (CAGR) of 19 per cent, while maintaining Profit Before Interest, Lease Rentals, Depreciation and Taxation (PBILDT) margins of 20-22 per cent.

 

This growth is likely to further enhance domestic defence capabilities and strengthen India’s position in the global defence landscape. India’s defence sector is witnessing sustained growth momentum amid rising geopolitical tensions, changing dynamics of modern warfare, and rapid technological advancements, the rating agency said in a sector report.

 

The Union Budget for FY27 allocated ₹7.85 trillion crore to the Ministry of Defence, a 15 per cent increase over FY26 (BE), underscoring the government’s continued focus on the sector. This enhanced allocation, together with policy measures such as foreign direct investment (FDI) liberalisation (up to 74 per cent under the automatic route), positive indigenisation lists, export promotion initiatives aimed at achieving India’s defence export target, and increased emphasis on R&D, is driving a structural shift in the sector. These initiatives aim to reduce import dependence and strengthen domestic manufacturing and export competitiveness, CareEdge Ratings said.

 

India remained the world’s second-largest arms importer during 2021–25, accounting for 8.2 per cent of global imports, driven by security dynamics. While imports declined by 4 per cent compared to 2016–20, reflecting improved domestic capabilities, ongoing procurement of advanced fighter aircraft, submarines and other high-technology defence systems indicates sustained reliance on foreign suppliers alongside ongoing indigenisation efforts.

 

Policy support through ease-of-doing-business initiatives, streamlined export procedures, and a strong push towards indigenous manufacturing has further accelerated export growth of 62.66 per cent at ₹38,424 crore in FY26 over FY25. Going forward, India aims to scale defence exports to ₹50,000 crore by FY29 and ₹2.8 trillion by 2047 under the Viksit Bharat vision, reinforcing its ambition to emerge as a significant global defence exporter.  Check - TOP GAINERS NSE | TOP LOSERS NSE

Kotak Institutional Equities view on aerospace & defence sector

 

Analysts at Kotak Institutional Equities believe India's defence sector is on a multi-year structural upcycle, driven by an 11 per cent CAGR in capital expenditure over FY26-30E, surging acceptance of necessity (AON) approvals (~10X over FY21-26 to ₹9.3 trillion), and a secular push toward indigenization with domestic procurement share rising from 54 per cent (FY19) to 70 per cent plus. 

 

Indian defence companies are well-positioned to benefit from rising geopolitical tensions, accelerating modernization programs and an expanding export opportunity (₹38,400 crore in FY26, targeting ₹50,000 crore by FY29). Over the medium term, the brokerage firm believes companies with large order books, proven execution and diversified product portfolios will be the winners. 

 

Indian defence exports grew 50X over the past decade, driven by cost-competitive indigenous platforms (Akash, Pinaka, BrahMos, Nagastra), proven combat performance in Operation Sindoor and easing of export controls. The US remains the largest destination, with Europe and Armenia emerging as key new geographies, the brokerage firm said in the sector report.  =========================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.