Defense stocks staged a sharp rebound on Monday after the sectoral index clawed back losses following an intraday fall of nearly 4 per cent, following the Union Budget presentation on Sunday. The government’s push to bolster the armed forces following Operation Sindoor and ongoing global geopolitical tensions was evident in the Budget, which has earmarked a record 15 per cent increase for the Ministry of Defense to ₹7.84 lakh crore for FY27, up from ₹6.81 lakh crore in FY26.
Shares of Bharat Forge, Data Patterns, Bharat Electronics (BEL), BEML and Garden Reach Shipbuilders & Engineers (GRSE) led the recovery, while Bharat Dynamics and Cochin Shipyard remained under pressure. Hindustan Aeronautics (HAL) also pared early losses to trade firmer as the session progressed.
Brokerage Goldman Sachs struck a constructive tone on the sector, highlighting that the overall defense budget has been raised 7 per cent year-on-year to ₹7.85 lakh crore, above its estimate of ₹7.75 lakh crore. The firm said the sharp 62 per cent jump in spending on other equipment—such as missiles, ammunition, radar systems and electronics—to ₹82,200 crore was a key positive surprise in the Budget.
According to Goldman Sachs, companies positioned as direct beneficiaries of higher equipment outlays include Solar Industries, BEL and Bharat Dynamics, as procurement momentum in these segments remains strong.
Published on February 2, 2026