EXPLAINED: What is behind the stellar rally in defence stocks today? Nifty India Defence sector zooms over 4%

Defence stocks gained strong momentum on Friday, September 12, driven by multiple order wins across various companies.

The Nifty India Defence sector rallied 4.34% to an intraday high of 8,041.50. MTAR Technologies was the biggest contributor, soaring 9.65%, followed by BEML (7.82%), Astra Microwave Products (7.8%), Garden Reach Shipbuilders & Engineers (7.6%) and Data Patterns (5.55%).

Further, Bharat Dynamics (5.22%), Paras Defence (4.66%), Mazagon Dock (3.9%), Unimech Aerospace and Manufacturing (3.89%), Cochin Shipyard (3.76%) and Solar Industries India (3.27%) were also trading with notable gains.

Shares of Hindustan Aeronautics, or HAL (3.21%), Bharat Electronics (3.18%), Mishra Dhatu Nigam (2.87%), Dynamatic Technologies (1.89%), Zen Technologies (1.59%) and DCX Systems (0.54%) also gained.

Paras Defence & Space Technologies shares rallied after the firm received orders from Opto Electronics Factory (OLF), a unit of India Optel Ltd under the Ministry of Defence, Government of India. The company informed exchanges that the fresh orders are worth about ₹26.6 crore, inclusive of taxes.

MTAR Technologies has been trading higher since September 10 after the firm received $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. Shares of the firm have soared 12% in the last two trading sessions.

Defence major Hindustan Aeronautics Limited (HAL) signed a Small Satellite Launch Vehicle (SSLV) Technology Transfer Agreement this week with India’s premier space agency, ISRO.

The Maharatna PSU has also received the third GE-404 engine from the United States for its LCA Mark-1A fighter jet programme, with the fourth engine expected to arrive in India by the end of this month.

On Thursday, Mazagon Dock Shipbuilders said negotiations with the Indian Navy with respect to the Submarine Project-P75(I) have commenced.

Defence PSU stocks are in focus following reports suggesting a US delegation will visit India next week to negotiate the sale of six additional P-8I maritime patrol aircraft to the Indian armed forces.

The report of the delegation’s visit comes as India-US trade negotiations are set to resume in Washington next week, following a pause after the US imposed additional tariffs on Indian imports due to New Delhi’s continued purchases of Russian oil.

Prime Minister Narendra Modi and US President Donald Trump have exchanged warm messages over the past few days, signalling an easing of recent tensions in bilateral ties.

Last week, a report said that Moscow is studying possible investment plans to make the Su-57 in India. This move follows the strengthened relationship between Prime Minister Narendra Modi and Russian President Vladimir Putin during the SCO Summit in China.