The Nifty Defence index surged over 3 percent on Monday, extending its winning streak to the seventh straight session, as buying interest remained strong in defence stocks.
Shares of Hindustan Aeronautics Ltd (HAL), MTAR Technologies and Bharat Dynamics saw sharp gains, rising up to 11 percent during intraday trade.
The recent rally comes after a prolonged downturn in the segment, as defence stocks were among the worst-hit in the market correction over the last five months. Several stocks in the space had plunged between 50-75 percent from their 2023 highs.
The buying momentum was further supported by the Defence Acquisition Council’s (DAC) approval of proposals worth Rs 54,000 crore last week. This comes in addition to defence approvals worth Rs 2.2 lakh crore in FY25, underscoring the government’s aggressive push for domestic procurement. The share of indigenous defence procurement has risen from 54 percent in FY19 to 75 percent in recent years.
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Shares of MTAR Technologies surged 10.56 percent to an intraday high of Rs 1,486 on the NSE. The stock opened with a 2.48 percent gain and has been rising for the past five sessions, gaining 20.35 percent in this period.
HAL advanced 5.86 percent to touch Rs 4,119.35, continuing its six-day rally, during which it has gained 20.7 percent. The stock gained traction following reports that GE Aerospace is set to begin delivery of the much-awaited GE-404 engines this month. The engines will power the Tejas Mark 1-A fighter jets, with the first batch of 99 units expected after a two-year delay.
Other defence stocks also participated in the rally, with Bharat Dynamics and Zen Technologies rising 5.82 percent and 9.6 percent, respectively.
All 16 constituents of the Nifty Defence index were trading in the green, pushing the index higher by 14.64 percent since March 13.
Investor sentiment received a further boost last week after German lawmakers approved a significant increase in defence spending, reinforcing global commitments to military modernisation.
Analysts noted that India’s accelerated defence procurement process—reducing procurement timelines from two years to six months—has strengthened confidence in the sector.
"The reforms in capital acquisition come at a critical time when order delays had raised concerns among investors,” analysts at ICICI Securities said, adding that FY26 could be a crucial year for the sector’s growth.
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