Defence stocks are showing signs of life again. Not the entire pack, but a few key names are clearly attracting steady buying.
On Tuesday, Hindustan Aeronautics Ltd (HAL) rose to Rs 4,264.10, while Bharat Electronics Ltd (BEL) gained 2.31% to Rs 448.10 around 1:30 pm.
Bharat Forge Ltd also traded higher. Among shipbuilders, Cochin Shipyard Ltd jumped 4.29%, while Mazagon Dock Shipbuilders Ltd and Garden Reach Shipbuilders & Engineers Ltd saw moderate gains.
According to Anand James, Chief Market Strategist at Geojit Investments Limited, the move is selective rather than across the board. “Defence stocks have selectively come into the limelight lately, with companies involved in aircraft manufacturing, avionics, radar modules, UAVs and related technologies gaining strength and attention since last week,” he said.
In simple terms, companies linked to aircraft and defence electronics are leading the charge.
James pointed out that delivery volumes in HAL, BEL and Bharat Forge have jumped nearly 100% above their recent averages over the past two days. Delivery volume refers to shares that investors take into their demat accounts instead of just trading quickly during the day. When this number rises sharply, it usually signals stronger conviction buying.
He also referred to RSI, or Relative Strength Index, which is a technical tool used to measure price momentum. A higher RSI generally indicates stronger buying interest.
“The average RSI of the Nifty Defence Index constituents remains below 50, whereas the RSI levels of HAL, BEL and Bharat Forge are around 60, indicating relative strength and momentum in these counters,” James said. This suggests that while the broader defence sector is not overheated, select stocks are clearly outperforming.
The long-term story also remains supportive. The government continues to allocate significant funds to defence manufacturing, and many of these companies have strong order books. An order book simply means confirmed contracts that will bring revenue in the coming years.
That gives investors visibility on future earnings.
On shipbuilders, James said early signs of recovery are visible. “Meanwhile, the shipbuilding segment has shown early signs of a reversal, but it may require broader participation before momentum builds further,” he noted. In other words, more investors need to buy into shipbuilding stocks for the rally to sustain.
For now, the strength is concentrated in leaders like HAL and BEL, with Cochin Shipyard showing emerging momentum. It may be early to call it a full comeback for the entire defence sector, but selective strength is clearly back.
