Data Patterns, GRSE, BDL, Mazagon Dock, BEL, HAL shares fall up to 9%; here's why

Shares of Data Patterns (India) Ltd, Garden Reach Shipbuilders & Engineers Ltd, Mazagon Dock Shipbuilders Ltd, Bharat Electronics Ltd (BEL), Hindustan Aeronautics Ltd (HAL) and Cochin Shipyard, among others, fell up to 9 per cent in Tuesday's trade, amid investor caution ahead of the Union Budget 2026. 

Data Patterns (India) Ltd fell 9.12 per cent to settle at Rs 2,259. Garden Reach Shipbuilders & Engineers Ltd fell 4.23 per cent to Rs 2,278.70, Mazagon Dock Shipbuilders Ltd declined 4.25 per cent to Rs 2,333.75 and Cochin Shipyard Ltd slipped 4.53 per cent to Rs 1,438.30. Paras Defence and Space Technologies Ltd declined 4.38 per cent to Rs 626.55. HAL shed 3.38 per cent to Rs 4,351.35. Bharat Dynamics Ltd (BDL) was down 3.61 per cent at Rs 1,451.85. BEL slipped 0.93 per cent to Rs 409. ZEN Technologies Ltd tanked 2.20 per cent to Rs 1,302.15.  

Nomura is expecting high single-digit to 20 per cent increase in allocation to defence sector in FY27 Budget. It sees a larger capital outlay for domestic procurement, modernisation and R&D.  MOFSL said it expects the upcoming Budget to place a strong emphasis on emerging priority sectors that can drive long-term growth and strategic resilience. In particular, it sees defense and allied industries to receive heightened focus, building on recent momentum in start-ups and the Centre’s formation of a dedicated committee to nurture allied defense capabilities.

It is expecting capex of the Centre to be at Rs 12.4 lakh crore, up 10.3 per cent for FY27. Out of this, it expects defence expenditure will be increased by 15 per cent over estimated Rs 1.8 lakh crore spending in FY26. 

Defense Acquisition Council (DAC) has approved capital acquisition proposals worth Rs 79,000 crore in its winter session, taking FY26 approvals to Rs 3.3 lakh crore. There was a one-time emergency procurement of Rs 40,000 crore in FY26.

UBS analysts are expecting a pick-up in budgeted defence expenditure to align with strong DAC (Defence Acquisition Council) approvals over the past two years. 

BMI, a unit of Fitch Solutions, noted that India’s external environment presents new spending needs. The country, it noted, has engaged in armed conflict with the People’s Republic of China and Pakistan during the past five years. At the same time, defence spending as a share of central government expenditure has stagnated, after falling significantly during 2018-2020, it said. 

"China’s elevated defence spending levels, along with Pakistan’s recent decision to increase its defence budget mean New Delhi must consider spending more on security in FY2026/27," it said.