Market experts attributed the weakness to a combination of valuation concerns, liquidity pressures and profit booking.
At 01:40 PM on Friday; Nifty India Defence index was the top gainer among sectoral indices, up 0.85 per cent as compared to 0.43 per cent decline in the Nifty 50.
Bharat Dynamics shares rose 7 per cent after it reported a jump in its profit in the second quarter of the current financial year
R&D spending by India's defense PSUs over the next five years is slated to increase with a projected expenditure of ₹32,766 crore, exceeding ₹30,952 crore invested in the past 10 years.
Among individual stocks, Solar Industries, Bharat Electronics, Data Patterns and PTC Industries are Goldman Sachs' top buy ideas, while Bharat Dynamics has been rated Sell'.
The brokerage has assigned an 'Add' rating to HAL and BEL, with target prices of ₹6,325 and ₹459, respectively, while Bharat Dynamics, Astra Microwave, and Data Patterns remain 'Not Rated.'
Godrej Consumer has strengthened its core portfolio and expanded into new segments, while UltraTech Cement reported strong Q1 results
Domestic brokerage Motilal Oswal noted that Bharat Dynamics delivered a 30 per cent Y-o-Y growth in execution during Q1FY26, aided by a strong order book and easing supply chain challenges.
Nifty India Defence index declined 2% in Friday's intra-day trade, corrected 17% from its all-time high level of 9,195.15 touched on June 6, 2025.
Technical charts show that defence stocks such as BDL, Mazagon Dock, Cochin Shipyard, ideaForge and GRSE can fall another 18% from here; check support levels each defence shares here.
BDL stock: Despite correction from its record high level, thus far in the calendar year 2025, Bharat Dynamics stock has outperformed the market by surging 50%, as against 4% rise in the BSE Sensex.
At 01:44 PM; the Nifty India Defence index was the top loser among sectoral indices, down 2.3 per cent, as compared to 0.41 per cent decline in the Nifty 50.
MOFSL today initiated coverage on Bharat Dynamics with a 'Neutral' rating and a target price of ₹1,900, indicating a downside of 4 per cent from current levels.
The sharp rally in defence stocks came after the Defence Acquisition Council (DAC), headed by Defence Minister Rajnath Singh, approved 10 major capital acquisition proposals on Thursday.
Punjab National Bank, Bharat Dynamics and Titan are among the three breakout stocks to watch
Defence stocks fall after the US President Donald Trump announced a "complete and total" ceasefire between Israel and Iran, signalling a potential end to the escalating conflict in West Asia.
Analysts recommend defence stocks are fully priced-in at current levels, hence booking some profit is advisable; but remain optimistic of long-term prospects.
According to a circular issued by the National Stock Exchange (NSE), a total of nine new stocks, including BDL, have been added to the F&O segment
Bharat Dynamics sees strong revenue visibility with easing supply chain hurdles and robust orders, though near-term stock upside may be capped due to rich valuations
Bharat Dynamics shares declined as investors booked profit in the stock after mixed Q4 results.