Defence Stocks in Focus as Data Patterns, GRSE, Zen, and DCX Rally Up to 15%
Indian defence stocks surged on February 19, 2025, with Data Patterns, GRSE, Zen Technologies, and DCX Systems gaining up to 15%. The rally was fueled by strong order inflows, government initiatives boosting the defence sector, and increased foreign investments.
Data Patterns surged 12% following a new contract win, while GRSE climbed 10% amid positive earnings expectations. Zen Technologies and DCX Systems also witnessed sharp gains, reflecting growing investor confidence in India’s expanding defence manufacturing capabilities. Analysts anticipate continued momentum as defence spending rises.
Shares of defense and associated firms are in high demand. They rose by much to 15% on the BSE in Wednesday’s intra-day trade amid strong volumes after defense secretary Rajesh Kumar Singh stated that relaxing Foreign Direct Investment (FDI) policies and industrial licensing procedures will boost growth in the military industry.
Rajesh Kumar Singh revealed that the present military budget of Rs 6.21 trillion is expected to increase by 9.5% to Rs 6.81 trillion in 2025-26. He emphasized the need to spend $30 billion per year over the next decade to modernize India’s defense forces. Of the overall capital investment, 75% is intended for domestic procurement, with the remaining 25% for the private sector.
DCX Systems, Zen Technologies, Data Patterns (India), Garden Reach Shipbuilders & Engineers (GRSE), Mazagon Dock Shipbuilders (MDL), Tejas Networks, MTAR Technologies, Bharat Dynamics, and Astra Microwave Products were all up between 5% and 12% on the BSE. In comparison, the BSE Sensex was up 0.04 percent at 75,994 at 09:52 a.m.
Most of these companies have fallen by up to 60% from their respective 52-week highs, owing to fears about a slowdown in order inflows caused by delays in tender completion.
The Union Budget 2025 reflects the government’s commitment to improving the military industry, with a record allocation of nearly Rs 6.81 trillion for the Ministry of military, representing a 9.53 percent increase over FY25. This includes a huge Rs 1.80 trillion budgeted for the Armed Forces’ Capital Budget, which would provide considerable tailwinds for the industry.
The defense capital spending for FY26 is Rs 1.8 trillion, a 13% increase over the FY25 revised estimate. The government recognizes the need to significantly raise defense capital expenditures in order to meet the need for more modernized platforms. According to ICICI Securities, the annual expenditure of $30 billion (~Rs 2.5 trillion) is a 40% increase from FY26.
GRSE rose 15% to Rs 1,404.50 on the BSE in intraday session. The shares of the state-owned military corporation had dropped 57% from its 52-week high of Rs 2,834.60 on July 5, 2024.
Data Pattern India’s shares were trading at Rs 1,602, up 14% from their 52-week low of Rs 1,405.35 reached in intra-day trade today. The stock fell 62 percent from its 52-week high of Rs 3,654.75 on July 5, 2024.
The company stated that it expects a significant ramp-up in the fourth quarter of fiscal year 2024-25 (January to March) and remains confident in achieving 20% to 25% revenue growth by FY ’25 while maintaining strong earnings before interest, tax, depreciation, and amortization (Ebitda) margins of 35% to 40%.
In the third quarter (Q3FY25), the exports market drove a significant percentage of revenue and order inflows. With a solid bidding pipeline, the business expects to get new orders of Rs 2,000 crore to Rs 3,000 crore over the next 18 months.
