Defence stocks staged a sharp rally on Wednesday, April 1 — the first day of the new financial year 2026-27. Stocks such as Garden Reach Shipbuilders & Engineers (GRSE), Bharat Electronics (BEL), Hindustan Aeronautics (HAL), Mazagon Dock, Cochin Shipyard, Bharat Dynamics (BDL), and Astra Microwave Products witnessed strong gains after a string of robust business updates, fresh order wins, and provisional FY26 performance announcements.
The rally was supported by sustained optimism around India’s defence manufacturing push and a recent wave of large procurement approvals, keeping the sector firmly in focus for investors looking for momentum as well as longer-term structural growth.
Defence stocks rally today
Leading the pack was GRSE, whose shares surged 20% to ₹2,365 on the BSE after the state-run shipyard reported its highest-ever annual turnover of ₹6,400 crore for FY 2025-26, up 26% from ₹5,076 crore in the previous fiscal year.
The provisional and unaudited performance capped a landmark year in which GRSE delivered eight vessels to the Indian Navy — the highest in a single fiscal — including two Project 17A frigates, two Survey Vessel Large ships and four Anti-Submarine Warfare Shallow Water Crafts.
In a notable feat, the shipyard also delivered three warships — Dunagiri, Sanshodhak and Agray — to the Indian Navy on the same day during FY 2025-26. The company further said it is in the advanced stages of concluding a prestigious contract for the construction of five Next Generation Corvettes, signalling continued order book expansion.
Midhani also saw strong buying, with the stock jumping 9.4% to its day’s high of ₹296.40 on the BSE after the company reported its highest-ever sales despite supply chain disruptions.
“MIDHANI achieved record‐breaking performance in FY 2025‐2026, reaching its highest‐ever sales of ₹1,206 Cr. (provisional and unaudited), a 12% year‐on‐year growth over the previous ₹1,074 Cr. This includes the successful execution of export orders worth ₹85 Cr. (provisional and unaudited). Despite significant geopolitical disruptions affecting the supply of raw materials, strategic planning and execution successfully mitigated production impacts,” the company said in a press release.
The company added that the growth was driven by the supply of specialised materials to key strategic sectors.
“Key contributors to this growth included the supply of Superalloys and Titanium alloys for indigenous aero‐engine programs, as well as performance-critical materials for the Indian Navy and Indian space sectors. Notable deliveries featured nickel‐based single crystal cast sticks and wrought superalloy bars and rolled rings for aerospace, alongside high‐strength low‐alloy steels for naval applications,” it added.
Another defence PSU stock, HAL, rose 5.3% to its day’s high of ₹3,671.30 after reporting revenue of ₹32,250 crore (provisional and unaudited) for the financial year ended March 31, 2026, compared with ₹30,981 crore in the previous year. The company said this was achieved despite challenges in deliveries of LCA Mk1A and HTI 40 due to supply chain issues arising from geopolitical and technical challenges. It added that deliveries of ALH, AL31-FP, RD-33 engines, and other products and services were accelerated, helping maintain the top line and profitability. HAL also said its order book remained healthy at around ₹2.54 lakh crore as on March 31, 2026, against the opening order book of ₹1.89 lakh crore, after adjusting for current-year liquidation.
“HAL has shown resilience and maintained steady growth despite geopolitical tensions, global conflicts, and supply chain challenges in the aerospace and defence sectors. During the past year, HAL strengthened its order pipeline, expanded its manufacturing capability and diversified into the civil segment to support future growth,” said Dr D K Sunil, CMD, HAL.
BEL shares soared nearly 7.3% to touch an intraday high of ₹430.20 after the defence PSU bagged an additional order and also reported record turnover of ₹26,750 crore in FY26. The company said on March 31 that it had secured additional orders worth ₹6,795 crore since its last disclosure on March 30, 2026.
“Orders received include mountain radars from MoD, Avionics package for the LCA from HAL, major export order for communication equipment, electronic fuzes, strategic components, upgrades, spares, services, etc.,” BEL said in a regulatory filing.
In a separate filing on April 1, the Navratna defence PSU said it had achieved a turnover of around ₹26,750 crore (provisional and unaudited) during FY26, against ₹23,024 crore in the previous year, registering a 16.2% growth.
The rally remained broad-based across the defence pack.
Cochin Shipyard jumped 15% to ₹1,373.20, BDL climbed nearly 11% to its day’s high of ₹1,215.50, Mazagon Dock surged 13.5% to ₹2,344.45, Astra Microwave Products advanced 8.7% to ₹923.85, Apollo Micro Systems rose 10% to ₹200.40, and Paras Defence and Space Technologies gained over 11% to ₹663.00.
The sector had also received a recent boost after Defence Minister Rajnath Singh approved agreements worth around ₹2.38 lakh crore last week. According to reports, Singh cleared the Acceptance of Necessity (AoN) proposals during a meeting of the Defence Acquisition Council (DAC), the primary authority for defence procurement in India.
With the latest approval, the total clearances in the current fiscal have reached an all-time high of ₹6.73 lakh crore, excluding the Rafale Acceptance of Necessity amounting to ₹3.25 lakh crore. This figure is more than three times last year’s total of ₹2.2 lakh crore.
HAL, BEL to BDL: Which defence stocks should investors buy?
Seema Srivastava, Senior Research Analyst at SMC Global Securities, said India’s defence sector is gaining momentum amid recent deals with Germany, France, the EU and Israel, which are expected to strengthen the country’s defence capabilities and support long-term growth.
“India’s defence sector is buzzing with recent deals with Germany, France, the EU, and Israel, boosting the country’s defence capabilities. The deals include India’s plan to acquire 22 Apache attack helicopters and 15 Chinook heavy-lift choppers from Boeing, and a deal with France for 26 Rafale fighter jets,” said Srivastava.
She added that these developments are expected to support growth in the sector, especially with a stronger focus on indigenous production and export opportunities. HAL and BEL are well-positioned to benefit from this growth, given their strong order books and diversified portfolios, she noted.
She also pointed out that India’s defence budget is expected to increase 15.20% to ₹7.85 lakh crore in FY26-27, which could benefit defence stocks further.
Meanwhile, Motilal Oswal Financial Services said defence companies currently have robust order books and stand to gain further from export opportunities. The brokerage noted that while imported components may create short-term challenges, the continued push towards indigenisation is gradually reducing dependence on imports. It maintained a positive view on the sector, with Bharat Electronics emerging as its preferred pick within its coverage universe.
The brokerage has retained a “Buy” on Bharat Heavy Electricals Ltd (BHEL), which is trading at 41.5x/35.4x FY27E/FY28E EPS, with an unchanged target price of ₹520 based on 45x two-year forward earnings. It has also retained a “Buy” on HAL, valuing the stock at ₹5,500 using a blend of DCF and 30x forward earnings, despite awaiting further clarity on Tejas deliveries. Similarly, BDL remains a “Buy” with a target price of ₹1,800, while Astra Microwave Products Ltd (AMPL) is also rated “Buy” with a target price of ₹1,150.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
