On Monday, September 21, shares of Indian defence companies gained as European leaders voiced concerns over Russian hybrid attacks. French President Emmanuel Macron warned that the threat of Russian hybrid attacks against Europe and France had intensified in recent weeks, prompting the French government to draft a plan to protect critical infrastructure and defence industry sites from drone and cyberattacks. Macron cited an attempted drone attack at Leipzig airport in Germany in August, attributed by German authorities to Moscow, and referenced warnings from Polish Prime Minister Donald Tusk about possible drone and missile strikes against NATO’s eastern flank. The heightened geopolitical tensions in Europe and growing concerns over Russian hybrid threats were reflected in the market.

At 09:58 AM, the Nifty India Defence index traded 0.47% higher at 9,395.35 levels, with seven constituents in the green and twelve in the red. Apollo Micro Systems rose about 6.7% to ₹395.45 on the BSE; Hindustan Aeronautics (HAL) shares climbed 1.39% to ₹4,867; and Solar Industries India increased 2.4% to ₹19,000 on the NSE. These gains were driven by the broader focus on air‑defence, radar, electronic warfare, missile and counter‑drone capabilities amid the European security escalation.

Hybrid attacks are defined as a combination of non‑conventional tactics such as cyberattacks, sabotage, disinformation and drone operations aimed at disrupting or pressuring an adversary. Russia has rejected allegations that it is behind hybrid attacks in Europe. Separately, a Russian drone struck a passenger train near the Ukraine‑Poland border on September 13, causing no reported casualties. French and German officials described the incident as part of a broader escalation in the security situation, prompting Poland to strengthen security around border crossings with Ukraine by installing blast barriers and observation posts.

The developments have heightened focus on Europe’s air‑defence, surveillance, electronic‑warfare and counter‑drone capabilities. For Indian defence stocks, the situation could provide a broader thematic read‑through for companies exposed to radars, electronic warfare, missiles and other defence systems. Shares of Bharat Electronics (BEL), Astra Microwave Products, Bharat Dynamics and Solar Industries are likely to be in focus amid heightened security concerns in Europe. BEL has recently secured ₹648 crore of additional orders, including a laser‑based IR jammer, while Astra Microwave is exposed to radar and electronic‑warfare programmes.

Bharat Dynamics Limited (BDL) has an order book of around ₹22,600 crore, and Solar Industries has exposure to newer defence systems and munitions. Analysts from Goldman Sachs noted that HAL is set to hand over Light Combat Aircraft (LCA) Tejas Final Operational Clearance twin‑seater trainers and HTT‑40 basic trainer aircraft to the Indian Air Force, alongside Dhruv NG helicopters to Pawan Hans Limited. The handovers span fighter/trainer aircraft and helicopters, indicating that execution across HAL’s manufacturing portfolio is beginning to pick up.

Citi reported that HAL handed over the final two LCA FOC trainers, three HTT‑40s and four Dhruv NG helicopters to end users, demonstrating broadening execution across fighter trainers, basic trainers and civil helicopters. The company expects deliveries of 10 aircraft by March 2027 as final software modifications and testing continue. Engine availability has improved, with 10 F404 engines received and further expected, supporting management’s targeted delivery ramp. Overall, progress across multiple platforms provides incremental comfort on the broader medium‑term delivery ramp, while progress on engines and testing should narrow the remaining Mk1A execution overhang.