Defence Stocks Rally As Nifty India Defence Index Climbs 1.6% On HAL Engine Supply, Bharat Forge MoU News

Defence stocks gained sharply on Friday, September 4, with heavyweight names such as Hindustan Aeronautics, Astra Microwave and MTAR Technologies leading the advance as developments around Tejas engine supplies and domestic manufacturing lifted the sector.

The Nifty India Defence index climbed 1.6%, or 154 points, to 9,825.20, compared with 9,670 at the previous close, according to NSE data. The benchmark was up 1.1% during the morning session before extending its gains later in the day.

The buying interest came after global aircraft engine manufacturer GE Aerospace shipped three additional F404-IN20 engines to Hindustan Aeronautics for its Tejas Mk1A fighter aircraft programme. The update also supported stocks linked to HAL's defence and aerospace supply chain, including Astra Microwave, Apollo Micro Systems and MTAR Technologies.

Adding to the positive sentiment was Bharat Forge's memorandum of understanding with a Belgium-based company for local manufacturing in India, reinforcing the broader focus on domestic defence production.

HAL shares rose 3.1% to ₹4,897, taking their one-month gain to 5.6%. Mazagon Dock Shipbuilders gained 2.9% to ₹2,534 and was up 6% over the past month, while Astra Microwave advanced 2.7% to ₹1,709 despite remaining down 6.8% over the same period.

MTAR Technologies was among the stronger performers, climbing 3.4% to ₹7,049 and extending its one-month gain to 11.6%. Apollo Micro Systems gained 2.5% to ₹388, while Bharat Dynamics rose 2.4% to ₹1,278.

BEML gained 2.2% to ₹2,110 and stood out on a one-month basis, with the stock up 24.9%. GRSE and Cochin Shipyard added 2.1% each, while Bharat Forge was up 0.8% at ₹1,987 despite the MoU announcement. The stock remained down 9.4% over the past month.

Why HAL shares rose on Friday

Hindustan Aeronautics shares gained after GE Aerospace delivered three additional F404-IN20 engines for the Tejas Mk1A fighter aircraft. The latest shipment takes the total number of engines delivered under the light combat aircraft programme to 10.

The development is significant for HAL as engine availability has been one of the key constraints behind delays in the Tejas Mk1A programme. The aircraft is more than two years behind its original delivery schedule to the Indian Air Force.

Media reports have indicated that GE Aerospace has committed to delivering 20 F404 engines during the second half of 2026, which could help ease the supply bottleneck and improve production visibility for HAL.

Reports have also indicated that HAL's production line is ready, with engine availability emerging as the key constraint affecting deliveries. The delays have reportedly led to penalties being imposed on GE Aerospace.

The Indian Air Force has ordered 180 Tejas Mk1A aircraft from HAL under the programme, making the pace of engine deliveries an important factor for the company's execution and delivery timelines.

HAL's weight gives it a major influence on the defence index

According to the latest index weightage review dated August 31, HAL has the largest weight in the Nifty India Defence index at 21.39%. Bharat Electronics follows with a 19.51% weight, while Bharat Forge accounts for 13.92%.

Other major constituents include Solar Industries India, Mazagon Dock Shipbuilders, MTAR Technologies, Astra Microwave and Data Patterns India. Moves in these heavyweight stocks can therefore have a significant impact on the performance of the sectoral benchmark.

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