Defence stocks: Amid renewed interest, defence stocks have made a strong comeback in recent sessions, with the Nifty Defence index gaining another 4.30% in today’s intraday trade to touch an 8-week high of 8,041, taking weekly returns to 8% so far. If the index ends the week around the same level, it will mark the biggest weekly gain for the index in the last four months.
The rally gave much-needed relief to the sector, as it had remained under pressure since the start of June, seeing significant market erosion, making the once-flying defence stocks wait for a longer period for a rebound.
Sentiment improved towards the sector after Ministry of Defence, on September 05, unveiled a comprehensive 15-year defence modernisation plan, marking a significant leap in the country’s military capabilities.
This ambitious roadmap focuses on integrating cutting-edge technologies such as artificial intelligence (AI), hypersonic missiles, nuclear propulsion, and directed energy weapons across the Army, Navy, and Air Force.
Meanwhile, tensions in Eastern Europe have intensified following a significant drone incursion into Polish airspace, allegedly carried out by Russian forces, marking a critical escalation in the ongoing conflict.
This event has prompted NATO to bolster its defenses and hold emergency consultations, while Russia and Belarus have initiated the “Zapad-2025” military exercises near NATO’s eastern borders, further heightening concerns.
MTAR, Data Patterns, BDL lead defence stocks rally
Looking at the individual counters that contributed to the significant rally, MTAR Technologies led the charge, with the stock gaining 19.32% this week, including a 10% rise in today’s trading session as sentiment was boosted following the company’s secured international order win worth ₹386 crore in the Clean Energy – Fuel Cells segment.
In an interaction with CNBC-TV18 on Thursday, the management said that they are aiming to double their revenue to between ₹1,500 crore and ₹1,600 crore by the financial year 2028. The management also stated that the clean energy segment is set to generate at least 100% higher revenue by the next financial year and that they are expecting huge orders from the nuclear division.
| Stock Name | Weekly Gains |
|---|---|
| MTAR Technologies | 19.32% |
| Data Patterns | 10% |
| Mazagon Dock Shipbuilders | 9.30% |
| Bharat Dynamics | 8.60% |
| Astra Microwave | 8% |
| Hindustan Aeronautics | 7.15% |
| BEML | 7% |
| Bharat Electronics | 7% |
| Mishra Dhatu Nigam | 6% |
| Garden Reach Shipbuilders | 5.3% |
| Cyient DLM | 4.75% |
| Cochin Shipyard | 4.63% |
| Solar Industries | 3.72% |
| Paras Defence | 3.49% |
| Source: Trendlyne |
BEML shares also edged up 8% in today’s session, resulting in a weekly gain of 7%. Data Patterns shares zoomed 10%, and Bharat Dynamics gained 8.60%.
Shipbuilding stocks such as Mazagon Dock Shipbuilders rallied 9.30% after the company announced earlier this week that it had finally begun negotiations regarding the P-75I submarine orders, which analysts cited as a key trigger for the stock.
Its peers, Garden Reach Shipbuilders and Cochin Shipyard, also advanced 5.3% and 4.63%, respectively, so far this week. Meanwhile, Hindustan Aeronautics Limited shares jumped 7.15%, marking their biggest weekly gain in two months. The company on Thursday received the third GE404 engine for the Light Combat Aircraft (LCA) Mark-1A.
Other stocks such as Astra Microwave, Bharat Electronics, Cyient DLM, Mishra Dhatu Nigam, Solar Industries, and Paras Defence have also rallied between 3.5% and 8% this week so far.
US-India defence dialogue resumes
Trade talks between the US and India, which have stalled in recent weeks, appear to be back on track. A US delegation comprising defense officials and Boeing representatives is reportedly likely to visit India next week to discuss a multi-billion-dollar deal for patrol aircraft.
According to a Bloomberg report, officials from the US Department of Defense and Boeing will meet in India in the coming days to discuss the currently stalled $4 billion deal for six P-8I naval patrol aircraft.
The P-8I aircraft, a variant of Boeing’s P-8 Poseidon, are designed for maritime surveillance and anti-submarine warfare. India currently operates 12 such aircraft, and the proposed acquisition aims to enhance the Indian Navy’s capabilities in the Indo-Pacific region.
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