Defence Stocks Fall For 5th Straight Session; Nifty India Defence Index Down 1% In Early Trade

Indian defence stocks extended their decline for a fifth straight session on Wednesday, 16 September, with the Nifty India Defence index falling more than 1% in early trade even as the broader market traded higher.

The latest fall has taken the Nifty India Defence index’s five-session decline to around 9.7%. The index had already dropped 8.5% over the previous four sessions.

At 11:41 am, the Nifty India Defence Index was down 0.30%.

Defence Stocks Under Pressure

Selling was broad-based across defence stocks on Wednesday. MTAR Technologies was the biggest loser among the stocks in the index, falling 4.4% to ₹6,639 in early trade. Apollo Micro Systems declined 4.2% to ₹370.35 in intraday deals. Other stocks that traded lower in early trade included:

• Solar Industries India, down 3.1% to ₹18,655

• AxisCades Technologies, down 3.1% to ₹1,663.90

• Paras Defence and Space Technologies, down 2.8% to ₹1,302.10

• Mishra Dhatu Nigam, down more than 2%

• Dynamatic Technologies, down more than 2%

• Hindustan Aeronautics (HAL) down 1.2% to ₹4,637.90

• Bharat Dynamics fell 1.3% to ₹1,120.10

• Mazagon Dock Shipbuilders slipped 0.7% to ₹2,221

Bharat Electronics (BEL) bucked the broader trend, rising 0.5% to ₹384.90. Astra Microwave Products also gained 0.8% to ₹1,606.90.

Multi-Year Defence Spending Cycle

The latest weakness comes despite financial institutions pointing to strong earnings visibility for the defence sector from a multi-year increase in Indian defence spending. They expect domestic procurement and rising exports to support the sector.

They also see the order cycle being driven by defence electronics, aerospace, missiles and other defence systems, along with unmanned systems. Note that the defence index had rallied on 8 September after the Defence Acquisition Council (DAC) cleared acquisition proposals worth around ₹1.10 lakh crore for the Army, Navy and Air Force.

Around 98% of the ₹1.10 lakh crore proposals approved on 7 September were earmarked for Indian industry. The approvals covered equipment across all three armed forces. The decline in defence stocks has followed that earlier run-up, with the index having gained 2.5% on 8 September before beginning its current five-session losing streak.

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