GRSE, IdeaForge, and Mazagon Dock surge up to 19%: Here is why defence shares are buzzing today

Shares of companies related to defence sector like Garden Reach Shipbuilders & Engineers (GRSE), IdeaForge, Cochin Shipyard, Mazagon Dock Shipbuilders, Bharat Dynamics, Bharat Electronics, BEML and Hindustan Aeronautics surged in trade on Wednesday. Analysts who track defence sector said that expectations of new orders from Ministry of Defence, as financial year, draws to close is fuelling a substantial rally in defence shares.

Shares of Garden Reach Shipbuilders rose 20%, IdeaForge jumped 15%, Cochin Shipyard advanced 9.15%, Mazagon Dock Shipbuilders gained 10%, Bharat Electronics rose 2.33%, Bharat Dynamics climbed 8.36%, Hindustan Aeronautics added 4.55% and BEML rose 7%.

GRSE recently completed the Contractor Sea Trials of two warships, Himgiri and Androth. The stock has been rising for the fourth consecutive session on Wednesday.

The government had allocated ₹6.22 lakh crore to Ministry of Defence in last year's full budget. Out of which, ₹1.72 lakh crore was set aside for modernisation of defence forces and ₹92,088 crore for sustenance and operational readiness. Meanwhile, the government had revised its budget estimate to ₹1.59 lakh crore, according to the revised estimates for Union Budget 2025.

For financial year 2025-26, the government increased defence budget to ₹6.81 lakh crore, an increase of 9.5% from the current financial year.

"Out of this, Rs 1,80,000 crore of total allocation will be spent on Capital Outlay on Defence Services. On Revenue Head, allocation for the Armed Forces stands at Rs 3,11,732.30 crore which is 45.76% of total allocation. Defence Pension receives a share of Rs 1,60,795 crore that is 23.60% and balance Rs 28,682.97 crore is for civil organisations under MoD," the government said in a press release.

Meanwhile, Indian defence companies are also likely to benefit from European countries ‘rearm Europe’ programme to ensure protection from any potential threat from Russian aggression in the region, CNBC TV18 reported.

Following a surge in defence shares, the measure of defence shares on the National Stock Exchange, NIFTY India Defence index surged 5% with all the 16 constituents trading higher.