BEL, Mazagon Dock, HAL, Cochin Shipyard shares: Pre-Budget rally? Why defence stocks are up today

Shares of defence stocks such as Hindustan Aeronautics Ltd (HAL), Bharat Electronics Ltd (BEL), Paras Defence and Space Technologies Ltd, Bharat Dynamics Ltd (BDL), along with defence shipping companies namely Garden Reach Shipbuilders & Engineers Ltd (GRSE), Mazagon Dock Shipbuilders Ltd and Cochin Shipyard Ltd climbed up to 7 per cent in Friday's trade amid a pre-Budget rally, as investors eye higher allocation for the sector in the Union Budget 2025. Recent strong Q3 numbers from defence players also added to the sentiment.

Paras Defence shares were up 6.28 per cent at Rs 1,129.40. BEL rose 4.7 per cent to Rs 292. HAL climbed 4.11 per cent to Rs 3,932.40. BDL advanced 3.64 per cent to Rs 1,312.90. Mazagon Dock added 4.63 per cent to Rs 2,459. Cochin Shipyard gained 3.75 per cent to Rs 1513.35. GRSE shares surged 6.04 per cent to Rs 1,611.40.

Ajay Garg, CEO at SMC Global Securities said the defence sector is expected to see continued prioritisation in the upcoming Budget, given India’s focus on enhancing self-reliance in defense manufacturing under Atmanirbhar Bharat and increasing defense capabilities amidst regional security concerns.

The Defence Ministry’s budget for capital expenditure (capex) is likely to see an increase, with estimates suggesting a 10–12 per cent rise, he noted.

"This will support the procurement of advanced technology, modernization, and indigenization efforts. BEL, HAL, and Bharat Dynamics are prime stocks to focus on, due to their strategic role in India's defense manufacturing and infrastructure projects.  With India continuing its push for self-reliance in defense, these companies could see significant growth in the medium to long term," he said.
Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking said defence stocks to such as HAL and BEL were in focus ahead of the Budget.

"HAL is favored for its strong growth potential driven by increasing defence contracts and a robust order book. Analysts project significant inflows, making it a solid investment choice. BEL stands out due to its leadership in defence electronics and consistent performance, supported by strong research and development capabilities. Both companies are well-positioned to benefit from rising government spending and initiatives aimed at enhancing self-reliance in India's defence sector," he said.