Defence shares fall for 2nd day: BEML, BDL, Mazagon Dock, others fall up to 3.5% amid profit booking

Defence shares fall for 2nd day: BEML, BDL, Mazagon Dock, others fall up to 3.5% amid profit booking

Defence shares saw profit booking for second consecutive session on July 11. Frontline defence stocks like BEML, Mazagon Dock, Garden Reach Shipbuilders & Engineers (GRSE) fell up to 3.5% as weak market sentiment also weighed on them.

The decline in defence shares comes after some of them rallied as much as 80% in the past three months due to multiple tailwinds like Operation Sindoor, NATO increasing its defence spending and Israel-Iran conflict.

At 11:30 am on July 11, BEML shares were trading 3.6% lower at Rs 4,437 apiece while those of Data Patterns were trading 3.4% lower at Rs 2,844.5 apiece.

GRSE's counter was trading 2.5% lower at Rs 2,823 while the scrip of Solar Industries was trading 2.6% lower at Rs 15,489.

At 12:15 pm on July 11, Nifty India Defence index was trading 1.8% lower at 8,526.

Mazagon Dock shares were trading 2.4% lower at Rs 3,184 apiece.

Hindustan Aeronautics Ltd and Cochin Shipyard shares were trading 1% and 1.5% lower, respectively.

Shares of Bharat Dynamics were trading 1.5% lower at Rs 1,864.5 apiece. Motilal Oswal Financial Services (MOFSL) has recently initiated coverage on BDL stock with a ‘Neutral’ rating and a target price of Rs 1,900.

"We like the business model of BDL and its ability to scale up its revenues and order book in current scenario, however, with fair valuations, we would look for lower price points to enter the stock," the brokerage said.

The fall in the defence stocks also comes on the back of overall easing geopolitical tensions. US President Donald Trump had hinted at a possible Gaza ceasefire deal between Israel and Hamas this week. This comes amid Israeli Prime Minister Benjamin Netanyahu’s visit to US. Earlier, the easing tensions between Iran and Israel after significant escalations in the oil-rich middle east, had pushed down the stocks.

BDL shares have gained over 69 percent this year, while those of jumped 75%. HAL shares are up 19% while Mazagon Dock Shipbuilders shares are up nearly 46%.