Astra Micra, Paras Defence, Cochin Shipyard surge over 2%: Here is why most defence stocks continue to rally

Most of the defence stocks were rallying on Monday, September 15, after reports suggested that the Defence Ministry is reviewing a proposal to buy 114 Rafale fighter jets under a ‘Made in India’ model.

The news agency reported that the Indian Air Force (IAF) has already submitted a Statement of Case for the acquisition, which is currently under review by various wings of the ministry, including Defence Finance. After the inter-ministerial scrutiny, the proposal will be considered by the Defence Procurement Board, headed by the Defence Secretary, and subsequently by the Defence Acquisition Council.

Estimated at over ₹2 lakh crore, the project mandates that more than 60% of the fighter’s components be manufactured in India. If approved, it would significantly bolster the IAF’s current Rafale fleet of 36 aircraft, in addition to the 26 Rafales ordered by the Navy. The total number of Rafales in Indian service could eventually reach 176, the report stated.

Following this, Nifty India Defence gained 1.45% to an intraday high of 8,161.70. At the time of writing the piece, the gauge was up 0.59%.

Astra Microwave Products led the gainers pack on the index, rising 2.63%. Cochin Shipyard (2.51%), Paras Defence (2.28%), Cyient DLM (1.98%), DCX Systems (1.8%) and Mishra Dhatu Nigam (1.52%) were also trading higher.

Further, Hindustan Aeronautics (1.4%), Zen Technologies (1.4%), Bharat Dynamics (0.73%), Dynamatic Technologies (0.36%), Mazagon Dock (0.33%) and Data Patterns (0.15%) were also among the gainers.

However, Garden Reach Shipbuilders & Engineers (-1.94%), Mtar Technologies (-0.82%), BEML (0.53%), Solar Industries (-0.20%), and Unimech Aerospace and Manufacturing (-0.19%) were the only laggards on the index.

Meanwhile, the government on Sunday unveiled a new framework to streamline, simplify and rationalise the revenue procurement process for the armed forces with an overall focus on making available required resources without any delays.

The Defence Procurement Manual (DPM) 2025 lays down the guiding principles and provisions for all revenue procurements in the defence ministry, valued at around ₹1 lakh crore for the current fiscal year, an official readout said.

Last week, several defence firms secured multiple orders, driving a stellar rally in the index.

Paras Defence & Space Technologies received orders from Opto Electronics Factory (OLF), a unit of India Optel Ltd under the Ministry of Defence, Government of India. MTAR Technologies bagged $43.87 million (₹386.06 crore) worth of fuel cell-related contracts from long-standing customer Bloom Energy Corporation, with deliveries scheduled by March and June 2026.

Hindustan Aeronautics Limited (HAL) signed a Small Satellite Launch Vehicle (SSLV) Technology Transfer Agreement this week with India’s premier space agency, ISRO. Mazagon Dock Shipbuilders said negotiations with the Indian Navy with respect to the Submarine Project-P75(I) have commenced.

Last week, reports indicated that a US delegation will visit India this week to negotiate the sale of six additional P-8I maritime patrol aircraft to the Indian armed forces.

As per news reports from Bloomberg and the Hindustan Times, the American team, comprising senior officials of the defence department and Boeing, the manufacturer of the P-8 Poseidon aircraft already in service with the Indian Navy, will be visiting India soon.