Defence stocks under pressure; HAL, BDL, MTAR fall up to 8%; here's why

Thus far in the month of February, the Nifty India Defence index slipped 5.5 per cent, as against 1.3 per cent rise in the Nifty 50.

Defence companies share price today

 

Share prices of defence companies were under pressure, falling up to 8 per cent on the National Stock Exchange (NSE) in Thursday’s intra-day trade.

 

Among individual stocks, MTAR Technologies slipped 8 per cent to ₹3,125 on profit booking. In the past eight trading days, till Wednesday, the stock had rallied 38 per cent.

 

The stock price of Hindustan Aeronautics (HAL) plunged 6 per cent to ₹3,952, extending its previous day’s decline on the NSE. In the past two trading days, the stock has tanked 12 per cent.

 

Unimech Aerospace and Manufacturing, Bharat Dynamics (BDL), Data Patterns India, Garden Reach Shipbuilders & Engineers, Mazagon Dock Shipbuilders, Dynamatic Technologies, Bharat Electronics (BEL), BEML, Solar Industries and Paras Defence and Space Technologies were down in the range of 2 per cent to 5 per cent on the NSE in intra-day trade.

 

 

At 10:32 AM; Nifty India Defence Index was down 2.7 per cent, as compared to 0.45 per cent decline in the Nifty 50. In the past two trading days, the defence index has slipped 3.7 per cent. Thus far in the month of February, the Nifty India Defence index has plunged 5.5 per cent, as against 1.3 per cent rise in the Nifty 50.  READ LATEST STOCK MARKET UPDATES TODAY LIVE

Why HAL’s stock price crashed 12 per cent in 2 days

 

According to reports, deliveries of the indigenous LCA Tejas Mk1A are likely to slip beyond the March–May timeline as final integration and certification of key avionics systems remain pending. 

 

While HAL has already manufactured at least five aircrafts, these are yet to be cleared for induction due to ongoing certification of the electronic warfare suite and integration of the indigenous Uttam AESA radar. Engine supplies have normalised and HAL has ramped up production capacity, including operationalising a second final assembly line at Nashik, but induction timelines remain linked to IAF clearances after full performance evaluations.

 

However, HAL on Advanced Medium Combat Aircraft (AMCA) programme clarified and said that the company has not received any official communication in this regard and, therefore, is not in a position to comment on these reports at this stage. HAL said the company would like to reiterate that it has a robust confirmed order book, providing strong revenue visibility, and a healthy production and execution pipeline extending up to 2032. CLICK HERE FOR DETAILS

 

On clarification on the status of LCA M KlA deliveries, HAL confirms that five aircrafts are fully ready for delivery, incorporating major contracted capabilities in accordance with the agreed specifications. An additional nine aircrafts have already been built and flown. Upon receipt of engines from GE, these aircrafts will be made ready for delivery. CLICK HERE FOR DETAILS

  Meanwhile, execution challenges for HAL have intensified, with delivery guidance cut from 12 LCA Mk1A aircraft to five, and now facing the risk of no inductions within the timeline. The slippages point to ongoing issues in avionics, EW and radar integration and certification, despite engine supplies normalising. However, once certifications are completed, deliveries are expected to ramp up, according to ICICI Securities.

 

While near-term FY26 deliveries may be impacted, the long-term outlook remains intact, backed by a strong 180-aircraft LCA order book and upcoming programmes like LCA Mk2, AMCA and helicopters, with supplier ecosystem beneficiaries (BEL, Astra Microwave, Data Patterns, Dynamatic Technologies and BDL) remaining unchanged, the brokerage firm said in a note.  ALSO READ | IT shares in focus as ADRs slide overnight; why are tech stocks falling?

Union Budget 2026-2027

 

The defence budget continues its strong trajectory with a capital outlay of ₹2.19 trillion (an 18 per cent increase over FY26 R.E.), while effectively limiting revenue expenditure growth to just 3 per cent. Notably, the Aircraft and Aero-engines category remains the largest line item at 29 per cent of the proposed capex; though this is moderation from the 39 per cent seen last year, said Maulik Patel, Head of research, Equirus Securities.

 

A standout structural reform is the new customs duty exemption on raw materials for aircraft parts (including civil aircraft). This is a strategic move to position India as a global MRO (Maintenance, Repair, and Overhaul) hub, incentivizing domestic servicing of both military and commercial fleets, said Maulik Patel.  ======================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.