Defence Shares Under Pressure
Defence sector stocks experienced a sharp downturn on Thursday, with the Nifty India Defence Index shedding 2.7% in intra-day trade, significantly underperforming the Nifty 50's 0.45% decline. This sell-off extended recent weakness, with the defence index down 5.5% for February, contrasting with a 1.3% rise in the broader market index. Several prominent defence companies saw their share prices dip, reflecting broader market sentiment and specific company-related concerns.HAL's Delivery Woes Emerge
Hindustan Aeronautics Ltd. (HAL) was a major laggard, its stock plunging over 6% to ₹3,952, extending a two-day decline that has seen it shed 12% of its value. Reports indicate that deliveries of the indigenous LCA Tejas Mk1A are likely to be postponed beyond the projected March-May timeline. This delay stems from pending final integration and certification of critical avionics systems, including the electronic warfare suite and the indigenous Uttam AESA radar.While HAL has manufactured at least five aircraft and has another nine built and flown, they await clearance for induction, contingent on performance evaluations and integration of these key systems. Engine supplies have reportedly normalized, and HAL has expanded production capacity, yet final acceptance hinges on Indian Air Force approvals. HAL confirmed that five aircraft are ready for delivery with major contracted capabilities met and additional aircraft are being prepared once GE engines arrive. Despite these confirmations, the guidance for FY26 deliveries has been reduced from 12 to five aircraft, raising immediate execution concerns.