Defence stocks gained up to 9 per cent in Tuesday's intraday deals after the Defence Acquisition Council (DAC) approved capital procurement proposals worth ~₹2.12 trillion, further expanding the sector's already-strong order pipeline. Twenty-one of the 22 Nifty India Defence constituents traded green in early trade today, driving the sectoral index 2.8 per cent higher to 8,908.
These approvals have rekindled interest in the defence pack after it lost 5.6 per cent in the last month. Among the top gainers from the pack were Apollo Micro Systems, up 8.7 per cent, Data Patterns, up 8.1 per cent, Paras Defence, up 7.3 per cent, and Astra Micro Systems, up 5.9 per cent.

MTAR Technologies shares were locked in the 5 per cent upper price band, while PSU stocks such as Midhani, HAL, BEL, BEML and Mazagon Dock rallied 3-4 per cent. Aequs remained the only loser from the pack following a 19 per cent decline, as it posted a wider loss of ₹52.2 crore for the second quarter of FY27 as against a loss of ₹20.6 crore in the same period last year, even as revenue witnessed a 45 per cent year-on-year (YoY) growth.
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"We believe India's defence sector is on a multi-year structural upcycle, driven by a steady growth in budgeted capital expenditure over FY2026-30E, surging acceptance of necessity (AON) approvals, with cumulative approvals of ₹ 18.9 trillion in FY2023-YTD FY27 vs ₹9.2 trillion in FY13-22, and push toward indigenization," according to the brokerage note.
However, sustained revenue growth will require faster conversion of AoNs into contracts and a sizeable procurement pipeline. Commenting on its key picks from the sector, Antique said it has BUY ratings on HAL, BEL, Solar Industries, Astra Microwave and Krishna Defence and Allied Industries.

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