Defence stocks in India rallied sharply on the first day of the financial year 2026-27, with notable gains across several companies. Garden Reach Shipbuilders & Engineers (GRSE) led the surge, with its shares rising 20% to ₹2,365 after reporting its highest-ever annual turnover of ₹6,400 crore for FY 2025-26, marking a 26% increase from the previous year. Other companies like Hindustan Aeronautics Ltd (HAL) and Bharat Electronics Ltd (BEL) also posted significant gains, with HAL's revenue reaching ₹32,250 crore, up from ₹30,981 crore in FY25. The rally is attributed to a series of robust business updates, fresh orders, and a positive outlook on India's defence manufacturing push, highlighted by Defence Minister Rajnath Singh's recent approval of agreements worth ₹2.38 lakh crore. Analysts suggest that companies like HAL and BEL are well-positioned for growth, supported by strong order books and diversified portfolios. The defence sector's momentum is expected to continue, especially with India's defence budget projected to rise by 15.20% to ₹7.85 lakh crore in FY26-27, further enhancing investment opportunities.