Reliance Infra shares hit 5% upper circuit after subsidiary wins Rs 600-crore order from German defence firm

Mumbai, June 25, 2025 – Shares of Reliance Infrastructure Ltd surged 5% on the Bombay Stock Exchange on Tuesday, locking at the upper circuit limit, after the company announced that its wholly owned subsidiary, Reliance Defence and Engineering Ltd, has secured a major defence contract worth ₹600 crore from a leading German defence conglomerate. The deal, hailed as a significant stride in India’s Make-in-India defence ambitions, buoyed market sentiment and reignited investor interest in the Anil Ambani-led firm.

A Strategic Win in the Defence Sector

According to a regulatory filing, Reliance Defence and Engineering will manufacture precision naval components and advanced weapons sub-systems for the German partner, whose identity remains confidential due to contractual non-disclosure clauses. The contract will be executed over the next 30 months, with production slated to begin in Q4 FY2025-26.

"This order validates our technical capabilities and growing reputation in the international defence manufacturing ecosystem," said a Reliance Defence spokesperson. "We are committed to delivering world-class quality and adhering to the highest standards of operational excellence."

The company added that the order aligns with its broader strategy to diversify revenues and expand its defence portfolio, particularly in naval and aerospace platforms.

Market Reaction: Reliance Infra Touches Upper Circuit

Reliance Infrastructure’s shares hit the 5% upper circuit at ₹230.60 on the BSE, amid a sudden spike in volumes. Nearly 13 lakh shares changed hands within the first two hours of trade—more than twice the daily average—before the stock was frozen due to upper circuit limits.

On the NSE, the stock mirrored the trend, gaining 4.97% to close at ₹230.45.

"Investors are responding positively to this contract win, which could signal a turnaround in Reliance Infra’s financial trajectory," said Sandeep Nayak, CEO of Centrum Broking. "After years of restructuring, such wins help regain investor trust, especially in capital-intensive sectors like defence."

Broader Market and Peer Movement

The news lifted the broader defence manufacturing segment on Indian bourses. Shares of Bharat Forge, Hindustan Aeronautics (HAL), and L&T Defence posted modest intraday gains, while BEML and Mazagon Dock Shipbuilders closed slightly higher.

The BSE Capital Goods index advanced 1.3% intraday, led by defence-related stocks.

“India’s growing prominence in global defence supply chains is increasingly being reflected in stock market movements,” said Rachit Mathur, Senior Analyst at Motilal Oswal. “The government's emphasis on indigenous defence production is creating strong tailwinds for private-sector players.”

Germany-India Defence Ties Strengthening

This contract also underscores the deepening defence cooperation between Germany and India. With Europe looking to diversify its defence supply chains amid geopolitical tensions and rising costs, Indian firms are emerging as cost-effective and technologically capable partners.

"European defence firms are actively scouting India for outsourcing and partnerships," noted defence analyst Lt. Gen. P. K. Sahni (Retd). "Reliance Defence’s contract win is a sign of India’s maturing industrial base."

Reliance Infra’s Strategic Recovery Path

The win comes at a critical time for Reliance Infrastructure, which has been attempting a comeback following years of debt overhang and asset monetization. The company has divested non-core assets, restructured debt, and focused on its engineering and defence verticals to restore profitability.

In FY24, the company posted a consolidated net profit of ₹94 crore versus a loss of ₹165 crore in FY23, aided by improved execution in EPC and energy segments. The order backlog stood at ₹28,000 crore as of March 2025.

“This order enhances our revenue visibility and strengthens our export credentials in defence,” said a senior Reliance Infra executive. “We are increasingly focusing on dual-use technologies and next-gen platforms to cater to both domestic and global customers.”

Analyst Commentary: Bullish Sentiment May Persist

Most analysts remain cautiously optimistic about the medium-term outlook for Reliance Infrastructure. The defence win could act as a re-rating trigger, especially if followed by further contract wins or financial deleveraging.

"While the order is relatively small in the context of the company’s overall backlog, it has symbolic value,” said Arvind Jha, head of research at Prabhudas Lilladher. “Execution and margins will be key.”

Brokerages have not yet changed their ratings but acknowledge the improving business mix.

Investor Outlook: Long Road, but Hope Revived

Retail and institutional investors who stayed invested in Reliance Infrastructure through turbulent times now see a glimmer of optimism. The resurgence of defence manufacturing in India, paired with policy tailwinds and strategic foreign tie-ups, could lend stability to the company’s longer-term prospects.

“There's still a long way to go in terms of consistent earnings delivery,” said Meera Doshi, an independent equity advisor. “But this order, if executed well, can restore credibility and unlock further opportunities, particularly in exports.”

Reliance Infrastructure’s ₹600-crore contract win from a German defence firm is more than just a business deal—it’s a statement of credibility in the global defence marketplace. With stock market momentum, government policy alignment, and improving financials, the company might be poised for a sustainable turnaround. Investors and analysts alike will closely watch its next moves, both on and off the battlefield of business.