Street View: No 'big bang measures' for India defence sector even with budget capex push

Garden Reach Shipbuilders & Engineers

02/02/2026 04:52

** India's defence sector to get order inflows after federal budget raised core defence capex by 18% y/y for FY27, analysts say

** India's defence index .NIFTYINDDEFENCE down 0.3% after falling about 5.6% on Sunday over investor disappointment due to lack of significant announcements for sector

** Hindustan AeronauticsHIAE.NS down about 1%, Bharat Electronics BAJE.NS up 0.72% and Bharat DynamicsBARA.NS down about 3.5%

PRIORITISATION TO SUPPORT ORDER FLOWS

** Citi says continued prioritisation on defence and localisation should support order inflows, though it sees limited near-term upside after sharp rally

** Nomura says budget lacks "big bang" measures even as it notes defence capex growth as positive

** CLSA expects defence spending growth to moderate on high base after strong increases in FY26, but says execution of large orders and exports remain supportive

(Reporting by Surbhi Misra in Bengaluru)

((Surbhi.Misra@thomsonreuters.com |  X: https://twitter.com/SurbhiMisra_  |;))