Nifty India Defence index today
At 02:15 PM; Nifty India Defence index was down 4.3 per cent, as compared to 2 per cent decline in the Nifty 50.
Why are defence shares under pressure?
Share price of HAL has tanked 30 per cent from its 52-week high of ₹5,166 touched on May 16, 2025.
Cochin Shipyard, GRSE, BDL, BEML, Paras Defence and Space Technologies, Mazagon Dock Shipbuilders and Unimech Aerospace and Manufacturing market prices have plunged between 40 per cent and 51 per cent from their respective 52-week highs.
HAL derives majority of its revenue from the Indian defense sector. Accordingly, a continuous flow of orders from the defence sector, which in turn depends on the defense budget, is critical for the company’s prospects.
The rating agency believes that HAL will continue to benefit from its strategic importance to the Indian defence forces, resulting in maintaining its leadership position in the Indian Aerospace and Defence industry supported by long track record of operations, high entry barriers, and maintaining its highly comfortable financial risk profile.
Analysts at Choice Institutional Equities reiterate a constructive stance on HAL despite near-term supply constraints relating to Tejas Mk-1A engine deliveries.
“Importantly, our investment thesis is not contingent on a single platform. Approx. 54 per cent of HAL’s order book is anchored in diversified and execution-visible segments including Su-30MKI upgrades, engine mfg., MRO and others. This portion alone translates to nearly ~4.3x FY25 revenue, providing substantial earnings visibility and mitigating platform-specific risk,” the brokerage firm said in the company update.
Analysts view the recent news regarding HAL’s potential exclusion from the Advanced Medium Combat Aircraft (AMCA) program as a material negative for its long-term growth outlook. ================================== Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.
