Shares of defence companies advanced up to 4 percent in Wednesday’s trade following reports that the government is likely to make additional fund allocations for the defence sector in the current financial year.
According to reports, the Centre may provide an additional Rs 40,000–45,000 crore under the capital budget for FY26 to support large defence projects. The government is expected to seek Parliamentary approval for the supplementary grants during the winter session, ET Now reported.
Among individual stocks, MTAR Technologies gained nearly 3 percent, while BEML, Hindustan Aeronautics Ltd (HAL), Garden Reach Shipbuilders & Engineers and Mazagon Dock Shipbuilders rose up to 4 percent.
Bharat Electronics, Paras Defence and Space Technologies and Unimech Aerospace and Manufacturing also traded higher.
Out of the 18 constituents of the Nifty Defence index, 15 closed in the green.
The broader optimism in the defence sector was also supported by global cues, including Europe’s plans to step up joint defence production and the United States considering the sale of Tomahawk missiles to Ukraine.
Such developments are seen as boosting defence-related demand globally, which could indirectly benefit Indian defence manufacturers through potential export opportunities and higher order inflows.
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