The defence index extended its winning run to a third day on Thursday, June 4, defying broader market weakness, as robust earnings for the March quarter and a strong upcycle, supported by sustained policy continuity, are driving interest in the sector.
After rising over 1% during the last two trading sessions, the Nifty India Defence index added another 1.1% to touch the 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, signalling broader optimism in the sector.
Zen Technologies shares led the gainers, rising 7%. It is the third straight day of gains for the stock following the company’s disclosure that the promoters did not encumber any shares in the financial year 2025-26 (FY26).
It was followed by Paras Defence, whose shares gained nearly 6%. The company on Tuesday announced an order win from Bharat Electronics Limited (BEL) valued at approximately ₹53 crore.
Midhani, Data Patterns, MTAR Technologies, Garden Reach Shipbuilders, Apollo Micro Systems, BEML were among other stocks that rose between 1-4% today. Index 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.
Defence sector outlook
According to Choice Broking, the defence companies under its coverage beat its revenue forecast by 3.1% on account of Tejas Mk1A delivery delays, which deferred revenue recognition. Meanwhile, upside surprise for profit growth was also observed by 3% on account of better margins and operating leverage across the sector.
Subsequently, the brokerage 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, backed by higher domestic procurement, increasing localisation of critical subsystems and expanding private-sector participation, defence production remains on track to reach ₹3 lakh crore by FY29E (~18% CAGR).
With defence exports targeted at ₹50,000 crore by FY29E, India is gradually strengthening its position as a competitive global supplier beyond import substitution. “We continue to view this as one of the most compelling multi-year manufacturing themes in India. Improving execution across large programs, supported by visible transition from development to production in key platforms, along with platform-level integration by private players and supply-chain deepening across DPSUs and Tier-I/II vendors, is driving better revenue visibility,” it said.
The pipeline of upcoming programs across aircraft, missile systems, sensors and strategic electronics remains robust over the next 3–5 years. In our 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, it added.
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