GRSE, BEML, other defence shares rise up to 3% as investors buy the dip after slump in 7 out of 8 sessions

Among the losers were Zen Technologies and Paras Defence, which have seen decline in their share prices ever since their June quarter results announcements last month.

Lately, defence shares have been in a sustained slump as the tailwinds that emerged for the sector earlier this year had eased.

Defence shares rallied anywhere between 40%-80% amid Operation Sindoor, NATO increasing its defence spending, escalating Israel-Iran conflict.

However, the focus shifted to earnings and the June quarter results of Mazagon Dock and Bharat Electronics Ltd were lower than expected and that caused concerns among investors about the high valuations.

According to Bhavik Joshi, Business Head at INVasset PMS, Indigenous manufacturing of fighter jet engines, expansion in export contracts, and deepening public-private collaboration continue to provide long-term momentum to the segment.

“For investors, this phase is less about chasing momentum and more about identifying companies with durable order books, execution strength, and export scalability,” Joshi said, while adding that the sector’s trajectory from here is likely to be more measured. Investors should see which stock provides better balance between near-term volatility and medium-term promise.

Naren Agarwal, CEO and Partner at Wealth1 also said that the underlying fundamentals of India’s defence sector remain robust, supported by rising domestic procurement, improving export prospects, and continued policy support under the 'Make in India' initiative. Strong order inflows into segments like aerospace, naval systems, and missile technology indicates long-term potential for the sector.

For investors, this phase presents an opportunity to reassess and focus on quality. Companies with solid order execution, diversified capabilities, and export readiness are likely to outperform over time, according to Agarwal, who advises a selective and patient approach, which may yield meaningful long-term returns.