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Defence Shares Extend Decline For Second Session As BEL MTAR Drag Index
Defence stocks extended their decline for a second consecutive session on October 5, with the Nifty India Defence index falling 0.39 percent to 9106.85 around midday.
By Finblage Editorial Desk
7:32 pm
5 October 2026
Defence stocks remained under pressure for the second consecutive trading session on Monday, with the Nifty India Defence index declining 0.39 percent to 9106.85 around 12:33 pm. Bharat Electronics emerged as the biggest drag on the index based on its contribution to the decline.
Bharat Electronics, MTAR Technologies, Solar Industries, Data Patterns and Paras Defence were among the stocks weighing on the defence index. On the other hand, Hindustan Aeronautics, Astra Microwave and Cyient DLM helped limit the decline. Hindustan Aeronautics was the largest positive contributor, according to index contribution data.
The weakness comes despite a strong defence ordering pipeline and expectations of continued government spending. Motilal Oswal Securities, in its latest capital goods and defence sector preview, retained Bharat Electronics as its top pick in the defence segment. The brokerage highlighted defence Acceptance of Necessity approvals of Rs 1.62 lakh crore in FY27 year to date and total approvals of around Rs 13 lakh crore from FY25 through FY27 year to date.
The brokerage expects defence ordering activity to improve as approved projects move towards finalisation. It also highlighted increasing private-sector participation, including the opening of missile production to Indian private companies and the transfer of technology by DRDO for conventional missile systems to Indian industry.
Aircraft programmes remain another key monitorable for the sector. The deadline for submitting the request for proposal for the Advanced Medium Combat Aircraft project has been shifted to October 30. Hindustan Aeronautics has also targeted the delivery of 10 Tejas Mk1A aircraft by March 2027, with 10 F404-IN20 engines received so far and additional deliveries expected from GE Aerospace.
Other defence programmes being monitored by investors include QRSAM, Akash NG, P75I, landing platform docks, next-generation corvettes and frigates, Tejas Mk1A deliveries and developments related to the AMCA programme.
Despite the near-term weakness, the Nifty India Defence index remained significantly above its levels from earlier in 2026. The latest index data showed the benchmark at around 9105, with a 1-month decline of more than 6 percent but a gain of nearly 20 percent over six months.
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