Defence Stocks Slide for 4th Consecutive Day Amid Profit Booking; Paras Defence Tanks 10% After Weak Q1

Mumbai, July 28, 2025 — Defence sector stocks extended their losing streak for the fourth straight session on Monday, as investors booked profits amid waning sectoral triggers and weak earnings from Paras Defence & Space Technologies.

Both the BSE and the NSE have moved the stock to the long-term ASM framework, which is typically in place to warn investors of an increase in price volatility.

Paras Defence Hits 10% Lower Circuit After Disappointing Q1

Shares of Paras Defence plunged 10 percent to ₹704.70 in intraday trade on 28 July 2025, triggering the lower circuit after the company posted a 32% sequential decline in net profit for Q1FY26. Although the profit saw a marginal rise on a year-on-year basis, the results disappointed investors.

Revenue from operations rose 11.5% YoY to ₹93.19 crore, compared to ₹83.57 crore in the same period last year.

The stock has now dropped 23% from its July highs, marking a steep correction as investor enthusiasm around defence plays shows signs of fatigue.

Market Awaits BEL and MDL June Quarter Results

All eyes are now on the upcoming earnings of Mazagon Dock Shipbuilders Ltd (MDL) and Bharat Electronics Ltd (BEL), scheduled to be announced later today. On July 28, 2025, both stocks were trading nearly 1.5% to 3% lower, signalling nervousness ahead of the results.

Brokerage estimates suggest MDL may post a consolidated Q1 net profit between ₹567 crore and ₹695 crore, with revenue in the range of ₹2,711 crore to ₹2,828 crore.

Previously, MDL had reported a 51% YoY fall in Q4FY25 profit at ₹325 crore, while revenue grew 2.3% YoY to ₹3,174 crore. BEL had fared better, posting an 18.4% YoY profit growth to ₹2,127 crore and a revenue increase of 6.8% in the same quarter.

Sectoral Index Under Pressure

The Nifty India Defence Index was down 2.00% to 7,826, marking a four-day cumulative decline of 5%. The index is sharply off its 52-week high of 9,195, reflecting growing investor caution.

Easing Global Tailwinds and Valuation Concerns

Defence stocks had earlier rallied on tailwinds like Operation Sindoor, heightened global military expenditure led by NATO, and Middle East tensions. However, with these factors tapering off, high valuations and profit-booking have driven the recent correction.

As the June quarter results roll in for BEL and MDL, investors will closely monitor whether the ongoing weakness deepens or signals a potential bottom for the defence pack.

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