Defence Stocks Dip 3rd Day Amid Profit Booking, Analysts See Long-Term Upside from DAC Deals

• Defence shares fell for the third consecutive day, with the Nifty Defence index declining over 2% in three sessions due to broad-based selling and profit booking.
• Major decliners included Mazagon Dock Shipbuilders (4%), Solar Industries India (3.5%), and Data Patterns (India) (3%).
• The decline occurred despite the Defence Acquisition Council (DAC) recently approving procurement proposals worth Rs 79,000 crore, adding to Rs 3.30 lakh crore in total AoN approvals.
• Analysts like PL Capital and Motilal Oswal maintain a positive medium-term outlook, citing strong multi-year order visibility and de-risked inflows for defence PSUs and private players.
• Key approvals include Pinaka system (benefiting Solar Industries India) and Astra Mk-II missile (benefiting Bharat Dynamics, Bharat Electronics), offering opportunities across various defence segments.

Why It Matters: Despite short-term profit booking, defence stocks have strong long-term growth potential from massive DAC approvals.