Mazagon Dock Shipbuilders to Bharat Dynamics: Defence stocks rise as ADA invites EOI for advanced medium combat aircraft

Defence stocks such as Mazagon Dock Shipbuilders, Paras Defence and Space Technologies, Bharat Electronics, Bharat Dynamics, and others traded higher on Thursday after the state-run Aeronautical Development Agency (ADA) invited interest in developing a fifth-generation stealth fighter jet AMCA.

DCX Systems and Paras Defence share prices jumped more than 6% each, while Mazagon Dock shares and Bharat Dynamics shares gained over 2% each.

The Aeronautical Development Agency (ADA) has invited Indian companies to participate in the development of the indigenous fifth-generation fighter jet, the Advanced Medium Combat Aircraft (AMCA).

On Wednesday, the ADA, under the Ministry of Defence, issued an Expression of Interest (EOI).

“The Objective of this EOI is to shortlist Indian Companies (owned & controlled by resident Indian citizens) who are technically capable for the Development, building of Prototypes, supporting Flight Test and Certification of AMCA…. The duration of the contract for Development, Prototyping, Flight Test and Certification of AMCA shall not exceed eight (8) years from the effective date of contract,” the notification stated.

Earlier in May, the Defence Minister Rajnath Singh approved the AMCA Programme Execution Model, the Ministry of Defence (MoD) said in an official statement.

Israel-Iran War Boost Momentum

Defence stocks also saw buying interest led by expectations of increased defence spending and order inflows amid rising global geopolitical tensions. The ongoing Israel-Iran war, and the recent conflict between India and Pakistan has intensified market anticipation of higher demand for defence equipment and services, analysts said.

Moreover, the prolonged Russia-Ukraine conflict continues to attract bullish sentiment in the defence sector.

The financial performance of the defence companies also improved during the fiscal fourth quarter ended March 2025 driven byb better execution amid push for defence indigenization.

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