On Monday, the stocks of three big Indian defense companies—Bharat Electronics Ltd (BEL), Hindustan Aeronautics Ltd (HAL), and Bharat Heavy Electricals Ltd (BHEL)—went down by up to 7%. This drop happened because people were unhappy with the government’s defense spending plan announced in the Union Budget for the year 2025-26.
The government set aside ₹4.92 lakh crore for defense, but many investors were hoping for a larger amount. As a result, BEL’s stock fell 6.5% to ₹263.4, HAL declined 6.9% to ₹3516.45, and BHEL dropped 5.1% to ₹189.65 on the Bombay Stock Exchange (BSE). Other companies in the defense sector also felt the heat. For instance, Bharat Dynamics’ shares fell by 10.2% to ₹1128.45, while private companies like Paras Defense, Data Patterns, and MTAR Technologies also saw their stocks drop significantly.
Analysts had anticipated a larger increase in the defense budget, with some expecting it to rise from last year’s ₹6.22 lakh crore. The overall capital spending only went up slightly, from ₹11.11 lakh crore to ₹11.2 lakh crore, which disappointed many investors. There are worries that the government is focusing more on infrastructure and political issues rather than on defense.
This cautious spending plan has raised fears about the future of important sectors like defense and infrastructure, leading to widespread selling of defense stocks. Experts noted that because of this, other sectors like FMCG (fast-moving consumer goods), automobiles, and consumer durables might see better performance in the future.
Even though there was a small rise initially, the mood turned negative after Finance Minister Nirmala Sitharaman’s budget speech, disappointing people in the defense sector.
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