HAL, BEL, BDL, Cochin, Mazagon Dock, Paras Defence: Why Mega Defence Stocks Are Down? Defence Shares Outlook

Following the broader bearish market, defence stocks continued to be under pressure on February 24. Top aerospace and defence players like Hindustan Aeronautics (HAL), Bharat Electronics (BEL), Bharat Dynamics (BDL), Cochin Shipyard, Mazagon Dock Shipbuilders, Paras Defence and others are also trading with sharp corrections. The start of this week has been broadly of cautious tone and profit-booking, which was escalated after reports of another Tejas jet crash during testing.

Defence Stocks On February 24:

Broadly, defence stocks traded on a mixed note on February 24th, however, the upside was limited and the large-cap defence players were trading in deep red. HAL was down by 1.3%, while its counterparts BEL and BDL plunged by 1.6% and 2.12%. Furthermore, Cochin Shipyard dipped by 1%, GRSE tumbled by 1.4% and Mazagon Dock Shipbuilders dropped by 1.3%, at the time of writing. Paras Defence is also down by 1%.

Among gainers are Premier Explosives who gained by 2.6%, followed by Data Patterns who climbed by 1.60%, while other stocks like MTAR Technologies, Bharat Forge, Apollo Micro Systems and Avantel traded between flat to nearly 0.5% upside.

Why Defence Stocks Are Under Pressure?

"We believe this decline appears sentiment-driven rather than fundamental. The recent incident involving the HAL Tejas has triggered near-term risk aversion, leading to profit booking across defence companies," said Putta Ravi Kumar, Defence Analyst at Choice Institutional Equities.

Another Tejas Jet Crash?

HAL is among the makers of Tejas aircrafts. However, the quality and performance of Tejas aircrafts have come under question after the indigenous multi-role Light Combat Aircraft (LCA), Tejas, crashed in November last year during its aerial display in Dubai Air Show, succumbing the life of an Indian Air Force (IAF) pilot. That was enough to shudder the very wings of Tejas aircrafts but not enough to reduce its credibility and reliance.

However, that was until February 22, 2026, where another Tejas light combat aircraft is reported to have sustained major damager during its airframe. As per sources reported by PTI said that the pilot of the aircraft ejected safely.

But the buzz was enough to push HAL share price down by 3% or more on February 23. HAL who is the largest defence player in India, has issued clarification.

HAL Tejas Aircraft Crash Clarification:

In its regulatory filing dated February 23rd, HAL said, "With reference to the news item appeared in Media Reports on LCA Tejas Incident, the Company acknowledges the recent media reports on the LCA Tejas incident and wishes to provide factual clarification. There has been no reported crash of the LCA Tejas. The event in question was a minor technical incident on ground."

Also, HAL clarified that LCA Tejas maintains one of the world's best safety records among contemporary fighter aircraft. Additionally, as a standard operating procedure, the issue is being analysed in depth and HAL is working closely with the Indian Air Force (IAF) for a speedy resolution.

Defence Stocks Outlook:

Choice Institutional Equities analyst does not believe that a single operational incident could alter the structural demand outlook, execution pipeline, or order visibility for the sector. He added, "We view the weakness as largely technical and sentiment-led."

Furthermore, Anand James, Chief Market Strategist, Geojit Investments explained that defence stocks have selectively come into the limelight lately, with companies involved in aircraft manufacturing, avionics, radar modules, UAVs, and related technologies gaining strength and attention since last week.

James added that stocks such as HAL, BEL, and Bharat Forge have seen notable traction, with delivery volumes jumping nearly 100% above their key averages over the past two days.

Moreover, the average RSI of the Nifty Defense Index constituents remains below 50, whereas the RSI levels of HAL, BEL, and Bharat Forge are around 60, indicating relative strength and momentum in these counters. Meanwhile, the shipbuilding segment has shown early signs of a reversal, but it may require broader participation before momentum builds further.

Accordingly, James added, "We will continue to ride stocks like HAL, BEL, and Bharat Forge, while keeping a close watch on Mazdock, GRSE, and Cochin Shipyard to capture emerging opportunities as they develop."

Disclaimer: The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred as "we"). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.