Indian Defence Stocks Show Resilience Amid Market Weakness

Defence Index Extends Winning Streak to Third Day

The Nifty India Defence index continued its upward trajectory on Thursday, June 4, despite broader market weakness, driven by robust earnings for the March quarter and sustained policy continuity. The index rose over 1% in the last two trading sessions and added another 1.1% to touch its day's high of 9,131, taking its three-day rise to 2.2%.

In the 19-pack index, 17 defence stocks rose, and only two declined, indicating broader optimism in the sector. The gains were led by Zen Technologies, whose shares rose 7%, marking the third straight day of gains following the company's disclosure that the promoters did not encumber any shares in the financial year 2025-26 (FY26). Paras Defence shares also gained nearly 6% after the company announced an order win from Bharat Electronics Limited (BEL) valued at approximately ₹53 crore.

Other stocks that rose between 1-4% include Midhani, Data Patterns, MTAR Technologies, Garden Reach Shipbuilders, Apollo Micro Systems, and BEML. Large-caps like HAL, BEL, and Bharat Dynamics eked out gains of less than 0.5%. Axiscades and Solar Industries remained the only two laggards in the Nifty India Defence index.

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Defence Sector Outlook

According to Choice Broking, defence companies under its coverage beat its revenue forecast by 3.1% due to Tejas Mk1A delivery delays, which deferred revenue recognition. The brokerage also observed an upside surprise for profit growth of 3% due to better margins and operating leverage across the sector. As a result, Choice Broking raised its FY27 and FY28 revenue estimates by 6.3% and 3.6%, respectively, as it recalibrates its expectations for execution delays and slower revenue ramp-up across key programs.

The brokerage further added that defence production remains on track to reach ₹3 lakh crore by FY29E (~18% CAGR), backed by higher domestic procurement, increasing localisation of critical subsystems, and expanding private-sector participation. With defence exports targeted at ₹50,000 crore by FY29E, India is gradually strengthening its position as a competitive global supplier beyond import substitution.

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The pipeline of upcoming programs across aircraft, missile systems, sensors, and strategic electronics remains robust over the next 3–5 years. In its view, the sector is steadily transitioning from policy-led intent to execution-driven growth, with earnings compounding supported by scale benefits, localisation gains, and improving export traction.