Nifty India Defence Index drops 1.8% on July 11 as traders book profits after a massive 3-month rally; easing geopolitical tensions weigh on sentiment
Mumbai, July 11 – Defence sector stocks witnessed another round of selling on Thursday as traders continued to book profits following a stellar three-month rally. At 12:15 PM, the Nifty India Defence Index was down 1.8% at 8,526, with key defence stocks like BEML, Mazagon Dock, BDL, and GRSE falling between 2% and 3.5%. The selloff comes amid fading geopolitical tensions in the Middle East and cautious commentary from brokerages on near-term valuations.
Several frontline defence counters had surged 40% to 80% over the past three months, driven by tailwinds such as Operation Sindoor, NATO’s increased defence spending, and heightened tensions between Israel and Iran. However, with recent signs of cooling in global conflict zones, investors are trimming positions.
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BEML, Data Patterns, Solar Industries Among Top Losers
At 11:30 a.m., BEML shares were down 3.6% at ₹4,437, while Data Patterns dropped 3.4% to ₹2,844.5. Solar Industries slipped 2.6% to ₹15,489, and GRSE was trading 2.5% lower at ₹2,823.
Mazagon Dock fell 2.4% to ₹3,184, while BDL traded 1.5% lower at ₹1,864.5, despite brokerage Motilal Oswal Financial Services (MOFSL) initiating coverage with a ‘Neutral’ rating and target of ₹1,900.
“We like the business model of BDL and its ability to scale up its revenues and order book… but with current valuations, we would wait for lower entry levels,”
MOFSL said in a note.
Other notable losers included:
HAL: -1%
Cochin Shipyard: -1.5%
Fading War Risk, Profit Booking Drive Downside
The recent weakness is also attributed to receding geopolitical tensions, which had been a major trigger for the previous up-move in defence stocks. US President Donald Trump this week hinted at a possible Gaza ceasefire deal, while Israel-Iran tensions appear to have cooled off since April highs.
“With war premium gradually deflating, especially post signs of diplomacy between Israel and Hamas, investors are taking profits off the table,” said a defence sector analyst at a domestic brokerage.
Near-Term Weakness Likely; Eyes on Order Wins, Budget Allocations
While structural demand for defence manufacturing remains strong under the Make in India initiative, traders should expect near-term consolidation in the sector, especially after the sharp run-up. Key focus areas now include fresh order flows, budgetary defence capex, and any major export announcements.
Defence Stocks Performance in 2025 YTD:
BDL: +69%
HAL: +19%
Mazagon Dock: +46%
Data Patterns: +75% (3-month rally)
Stocks to Watch Ahead:
BDL, Mazagon Dock – Correction from peak; watch for technical support
HAL, BEL, Cochin Shipyard – Relatively stable but sensitive to policy cues
Solar Industries – Linked to ammunition orders and Middle East tension trajectory
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