Defence Stocks GRSE, Bharat Dynamics and others surges over 15%, Here to know why

Demand exists for shares of defence and associated firms. In the midst of high volumes, they surged by as much as 15% on the BSE during Wednesday's intraday trading after Defence Secretary Rajesh Kumar Singh stated that easing the FDI policy and the industrial licensing process will spur expansion in the defence sector.

The present defence budget of Rs 6.21 trillion is expected to increase by 9.5% to Rs 6.81 trillion in 2025–2026, according to Rajesh Kumar Singh.

He emphasised that to modernise India's armed forces, $30 billion must be spent every year for the next ten years. Seventy-five percent of the overall capital expenditure is allocated to domestic procurement, with the remaining twenty-five percent going to the private sector.
 

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DCX Systems, Zen Technologies, Data Patterns (India), Garden Reach Shipbuilders & Engineers (GRSE), Mazagon Dock Shipbuilders (MDL), Tejas Networks, MTAR Technologies, Bharat Dynamics and Astra Microwave Products, were up in the range of 5% to 12% on the BSE.  

Concerns over a slowdown in order inflows caused by delays in the finalization of bids have most of these equities reversed by up to 60% from their respective 52-week highs.

With a record allocation of almost Rs 6.81 trillion for the Ministry of Defence, therefore indicating a 9.53% rise from FY25, the Union Budget 2025 shows the government's will to enhance the defence sector. This includes a significant Rs 1.80 trillion set aside under the Armed Forces' Capital Budget, which offers the sector major industry tailwinds.

 

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Among individual stocks, GRSE saw a rise of over 10%, reaching Rs 1,404.50 on the BSE during intraday trading. This increase comes after the stock of the state-owned defense company had fallen by 57% from its 52-week high of Rs 2,834.60, which was recorded on July 5, 2024. 

Bharat Dynamics, another significant player in the defense sector, also exhibited strong activity today, gaining 4.64% on February 19, 2025. This performance signifies a notable trend reversal, as the stock has bounced back after three consecutive days of decline. At its peak, the stock reached an intraday high of Rs 1,061, reflecting a 5.04% increase.

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