Defence pack under pressure; index sheds 2.5% amid Tejas setback and Russia-Ukraine peace talks, HAL, BEML, Midhani among top losers

Mumbai | November 24 – India’s defence stocks came under broad selling pressure on November 24 as the Nifty India Defence Index slipped 2.5%, weighed down by the Tejas fighter jet crash at the Dubai Airshow and renewed signs of progress in Russia-Ukraine peace discussions. The combination of an operational setback and easing geopolitical tensions triggered profit-taking across key public-sector defence counters.

The index fell to 7,912.80 in morning trade, marking its weakest level in more than two weeks and extending losses for a second straight session. Investor sentiment, which had been buoyant in the sector on the back of strong order books and export momentum, turned cautious following the negative news flow.

HAL slides after Tejas crash; sector reacts to programme concerns

Hindustan Aeronautics Ltd (HAL) saw one of the sharpest reactions, dropping nearly 9% intraday before closing over 3% lower at ₹4,443. The decline followed the fatal crash of a Tejas Light Combat Aircraft during an aerobatic display at the Dubai Airshow on November 21, which resulted in the death of Wing Commander Namansh Syal of the Indian Air Force.

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Videos from the event showed the single-seat LCA descending rapidly before erupting in flames, with a plume of black smoke rising over Dubai World Central. This marks the second incident involving a Tejas aircraft in less than two years, adding to near-term concerns around the programme’s operational track record.

Although analysts maintain that HAL’s long-term fundamentals remain intact, the stock faced immediate volatility as the market reassessed export prospects and short-term sentiment around India’s indigenous fighter aircraft programme.

Peace signals from Ukraine pressure global defence names

Further weighing on the defence sector were reports from Geneva indicating movement toward a refined peace framework between the US and Ukraine. Early negotiations suggest modifications to a prior proposal that was criticised for being too favourable to Russia. Even the possibility of a diplomatic breakthrough was enough to soften demand for defence stocks globally.

European defence majors also felt the impact, with Germany’s Rheinmetall sliding over 4%, Renk and Hensoldt down nearly 3% each, and Sweden’s Saab losing more than 2%. The broader Stoxx 600 Aerospace & Defense Index also drifted lower.

For Indian markets, the easing geopolitical temperature translated into a more cautious outlook on defence procurement cycles and export visibility- key drivers of the sector’s recent rally.

Top domestic losers: Midhani, BEML, GRSE, Astra Microwave

Mishra Dhatu Nigam (Midhani) was among the steepest domestic decliners, falling over 5% to ₹328. As a supplier of speciality alloys and metals used in aircraft, missiles, and critical defence systems, the stock is often sensitive to developments impacting HAL’s production outlook.

BEML, Garden Reach Shipbuilders & Engineers (GRSE), and Astra Microwave Products each dropped around 4%, while Bharat Electronics Ltd (BEL) declined more than 3%, becoming the top Nifty 50 loser for the day.

Solar Industries and Zen Technologies slipped nearly 3%, whereas Bharat Dynamics (BDL), Paras Defence and Mazagon Dock Shipbuilders fell over 2%. Cochin Shipyard also closed lower.

Outlook

Despite the decline, the sell-off as sentiment-driven rather than a structural shift in the sector’s long-term trajectory. India’s defence capex cycle remains strong, order books are at multi-year highs, and export pipelines are expanding.

However, near-term volatility is expected to persist as investors weigh operational concerns around the Tejas platform and the implications of any diplomatic progress in the Russia-Ukraine conflict.

For long-term investors, analysts say selective accumulation on dips could remain a strategy, but not without recognising the elevated sensitivity of defence stocks to global headlines.

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