Nifty Defence index edges higher today as BEL leads gains a day after HAL-driven slide

Bharat Electronics Ltd (BEL)

The Nifty India Defence index regained ground on Tuesday, rising 0.28 percent to 7,935.2 by around 12:15 pm, driven largely by a rebound in Bharat Electronics Ltd (BEL) after the index had slumped the previous day following a sharp fall in Hindustan Aeronautics Ltd (HAL).

Bharat Electronics shares rose 1.8 percent to Rs 411 in today’s trading session. Hindustan Aeronautics, which fell yesterday, traded nearly flat at Rs 4,446.6 today. Cyient DLM stock was the top performer on the index, gaining 2.9 percent to Rs 432.4. Data Patterns also advanced 1.5 percent to Rs 2,984.

The recovery in BEL came after the defence ministry announced that the company and France’s Safran Electronics & Defence have signed a joint venture cooperation agreement to produce the highly agile modular munition extended range (HAMMER) precision-guided air-to-ground weapon in India.

Under the proposed structure, BEL and Safran will hold 50 percent each in the potential joint venture, with the production transfer taking place in phases. BEL will lead final assembly, testing and quality assurance. The stock is up around 40 percent so far this year.

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Defence rebound follows Monday’s HAL-led decline

Tuesday’s modest gains follow a sharp drop in the Defence index on Monday, when it fell more than 2.5 percent after HAL shares slumped in reaction to the Tejas fighter jet crash at the Dubai Air Show on 21 November, which resulted in the death of an Indian Air Force officer.

HAL shares had plunged nearly 9 percent in early trade on Monday to Rs 4,205.25 -- their lowest in over seven months -- before recovering part of the loss to close more than 3 percent lower at Rs 4,443. Its peers also tumbled: Mishra Dhatu Nigam (Midhani) sank over 5 percent, while BEML, GRSE and Astra Microwave Products declined around 4 percent each. BEL, too, had ended Monday more than 3 percent lower, the top loser on the Nifty 50.

HAL later described the Tejas crash as an “isolated occurrence arising out of exceptional circumstances”, adding that there would be no impact on operations, financial performance or future deliveries.

Analysts said that HAL shares could see short-term pressure after such incidents, but sentiment would improve as clarity emerges. Some brokerages reiterated positive views on the company, pointing to its strong order book and long-term strategic role in India’s defence ecosystem.

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