Shares of major defence sector companies including Bharat Dynamics, Hindustan Aeronautics, and Mazagon Dock Shipbuilders witnessed significant declines on Monday amid broader selling pressure in defence stocks post-Union Budget 2025-26. Bharat Dynamics fell over 7.8%, Hindustan Aeronautics dropped 6.5%, and Mazagon Dock Shipbuilders saw a decline of 5.8%, reflecting concerns among investors over the budget allocation for defence.
The Union Budget 2025-26 revealed a 9.52% growth in defence spending compared to the previous year. However, most of the increase is attributed to rising costs of pensions and revenue expenditures, leaving limited room for capital acquisitions and modernisation. The capital budget for modernisation increased by just Rs 8,000 crore to Rs 1.80 lakh crore from Rs 1.72 lakh crore in the current fiscal.
| Stock Name | BSE Price (%) | NSE Price (%) |
|---|---|---|
| Bharat Dynamics | -7.85% | -7.72% |
| Hindustan Aeronautics | -6.50% | -6.38% |
| Mazagon Dock Shipbuilders | -5.80% | -5.78% |
| Paras Defence | -6.26% | -5.78% |
| Bharat Electronics | -5.32% | -5.29% |
| Kaynes Technology | -5.23% | -5.29% |
| NIBE Ltd. | -4.73% | Not Listed |
| Cochin Shipyard | -4.79% | -4.82% |
| PTC India | -4.86% | -4.36% |
| Data Patterns | -1.61% | -1.07% |
| MTAR Technologies | -2.35% | -2.35% |
| Astra Microwave | -3.98% | -3.95% |
| Avantel | -2.56% | -2.23% |
Investors were also discouraged by the defence ministry’s failure to fully utilise the capital budget allocated in the previous year, with Rs 13,000 crore being returned due to underutilisation. This limited capital growth and emphasis on revenue expenses have created bearish sentiment in defence sector stocks.
Furthermore, the budget documents do not outline specific allocations for the Army, Navy, and Air Force, further fueling investor apprehension.
