Defence stocks witnessed sharp selling pressure on Thursday with the Nifty India Defence Index declining 2% during intraday trading, making it the top loser among thematic indices. According to Business Standard, the index was down 1.9% as of 02:24 PM, significantly underperforming the Nifty 50's 0.03% decline. The defence index has corrected 7.2% from its 52-week high of 9,487.75 touched on May 8, 2026, despite the broader market showing resilience. In the past two trading days, the defence index has slipped 3.6%, highlighting the sector-specific nature of the decline amid continued foreign institutional investor (FII) selling and weak global cues.
Among individual defence stocks, MTAR Technologies emerged as the biggest loser, plunging 12% to ₹6,225 amid heavy volumes, as reported by Business Standard. The stock has underperformed significantly in the past week, falling 20% compared to the Nifty 50's 1.5% decline. MTAR hit a record high of ₹8,449.50 on May 22, 2026, and its 52-week low of ₹1,390.50 was recorded on August 29, 2025. Other major declines included Data Patterns (India), Paras Defence and Space Technologies, Apollo Micro Systems, Mishra Dhatu Nigam (MIDHANI), Solar Industries India, BEML, Zen Technologies, Garden Reach Shipbuilders & Engineers and Astra Microwave Products all falling in the 2-4% range. Paras Defence had previously emerged as the biggest loser with a 6.5% decline in earlier sessions.
Despite the recent correction, the Nifty India Defence Index has significantly outperformed the market, soaring 22% since April 2026, as reported by Business Standard. In comparison, the Nifty 50 was up only 4% during the same period. Thus far in calendar year 2026, the defence index has soared 14% against an 11% decline in the benchmark index. Individual stock performance has been particularly strong with MTAR Technologies' share price skyrocketing 160% in CY26, while Data Patterns zoomed 62%, followed by Paras Defence (45%), Astra Microwave Products (42%), Solar Industries India (41%), Apollo Micro Systems (39%) and Zen Technologies (27%). The sector's execution remained healthy in FY26 with 12% YoY growth despite mixed Q4FY26 performance, with average EBITDA margin at 32% and profit after tax increasing 11% YoY.
MTAR Technologies' 12% decline was primarily attributed to a 10% crash in Bloom Energy stock overnight in the US, as reported by Business Standard. Bloom Energy is the single largest client for MTAR Technologies, contributing more than 55% of the company's total revenue. The company is a leading manufacturer engaged in manufacturing mission-critical precision engineered systems for clean energy, civil nuclear power, fuel cells, hydel and aerospace & defence sectors. The closing order book for FY26 stands at ₹2,580 crore, with management guidance of ₹2,800 crore, though some nuclear orders and defence orders were deferred to the current quarter. Management remains confident of receiving large orders across various sectors during FY27, with the estimated closing order book expected to be close to ₹5,000 crore at the end of the year.
Despite near-term corrections, the defence sector outlook remains constructive with aggregate order backlog improving to approximately 4.6x FY26 revenue, providing strong multiyear revenue visibility, according to ICICI Securities. The brokerage firm remains constructive on the sector, supported by an accelerating procurement pipeline, increasing indigenisation, rising export opportunities and sustained policy support for domestic defence manufacturing. Choice Broking had previously highlighted the significant opportunity emerging in India's naval industry, noting that the sector is entering a high-growth phase supported by a short-to-medium-term order pipeline of approximately ₹2.35 trillion (around USD 25 billion) through 2035. The government has further reinforced its commitment through the ₹69,700 crore Shipbuilding and Maritime Development package, supported by Maritime India Vision 2030 and Maritime Kaal Vision 2047.
