Nifty Defence tanks 11% from high; GRSE, Paras, slump up to 19% post Budget

Defence stocks: Data Patterns, GRSE, Paras Defence, BEML, Mazagon Dock and BEL among others crashed up to 19% in Sunday's intra-day trade even as FM proposed 15% higher Budget spends for the sector.

Shares of defence-related companies have taken a sharp U-turn, and were seen trading with significant losses in the second-half of the Budget day trading session on Sunday.  The Nifty Defence index tumbled nearly 11 per cent in intra-day deals. The Nifty Defence index has surged to a high of 8,359 in early morning trade. However, post the Budget announcement, the index slumped to a low of 7,459 - down 10.8 per cent from the day's high.  Among individual stocks, Data Patterns tanked 19 per cent in intra-day deals. Garden Reach Shipbuilders & Engineers (GRSE), Paras Defence and Space Technologies, BEML, Mazagon Dock Shipbuilders and Mishra Dhatu Nigam (Midhani) plunged in the range of 13 - 16 per cent. Most of the other defence index components (stocks) had also cracked up to 10 per cent from their respective highs.  The selling at these counters can be attributed to profit-taking as defence stocks had outperformed in the run-up to the Budget 2026.  In January, defence stocks outperformed the market and gained up to 21 per cent. The Nifty Defence index rose 5.6 per cent, while Nifty 50 shed 3.1 per cent. Among stocks - MTAR Technologies gained 21 per cent. GRSE, Bharat Electronics (BEL), Solar Industries, Midhani, Hindustan Aeronautics (HAL) and Bharat Dynamics gained 5 - 13 per cent each in anticipation of higher allocation towards defence.  The Budget 2026 on Sunday proposed a 15 per cent hike in defence spending by increasing the overall defence budget to ₹7.85 lakh crore for FY27, up from ₹6.81 lakh crore in FY26.  Another major highlight was the sharp rise in defence capital expenditure, which has increased by 28 per cent to ₹2.31 lakh crore from ₹1.80 lakh crore. READ MORE  Analysts believe that the increased Budget allocation towards defence highlights India's aim to boost domestic spending.  "The higher allocation to defence underscores the government's twin priorities of strategic preparedness and domestic capability-building. Beyond immediate security needs, capital-led defence spending has a powerful economic multiplier—supporting indigenous manufacturing, technology development and skilled employment. A sustained shift towards domestically sourced defence capital can strengthen India's strategic autonomy while creating durable growth opportunities across the broader industrial ecosystem," says Varun Gupta, CEO, Groww Mutual Fund.  Back to market, at 3:15 PM, the Nifty Defence index quoted with a loss of 5 per cent at 7,765. In comparison, the Nifty 50 index was down 1.9 per cent or 470 points at 24,850.  Bharat Dynamics was the top loser, down 10 per cent. GRSE, Paras Defence, Data Patterns and Mazagon Dock were down 7 - 10 per cent each. Cochin Shipyard, BEML, Midhani, Zen Technologies, HAL and BEL were the other major laggards.