HDFC Defence Fund Increases Stake in Bharat Forge, Eicher Motors; Trims Exposure in 4 Stocks in October

HDFC Defence Fund, India’s only actively managed mutual fund focused on the defence sector, made notable portfolio adjustments in October 2025. The fund increased exposure to select automobile and defence-linked companies while paring stakes in others to balance its portfolio.

Key Additions in October

The fund raised its holdings in Bharat Forge, Eicher Motors, and Astra Microwave Products. It added 9.49 lakh shares of Bharat Forge, taking the total to 65 lakh shares in October from 55.50 lakh in September. Similarly, it purchased 1.74 lakh shares of Eicher Motors and 5,559 shares of Astra Microwave Products during the same period.

These additions indicate the fund manager’s confidence in companies that are indirectly linked to India’s defence and manufacturing growth story. Bharat Forge, for instance, plays a significant role in defence manufacturing and export potential, while Eicher Motors adds diversification through the automobile sector.

Stocks Trimmed or Exited

The fund reduced exposure in BEML, Dee Development Engineers, Avalon Technologies, and JNK India. Among them, Avalon Technologies saw the biggest reduction with 1.47 lakh shares sold, bringing the total holding down to 10.03 lakh from 11.51 lakh in September. Similarly, 1.20 lakh shares of BEML, 75,022 shares of Dee Development Engineers, and 37,179 shares of JNK India were offloaded.

A complete exit was made from Techno Electric & Engineering Company by selling 2.11 lakh shares. The fund did not introduce any new stocks to its portfolio in October.

Stable Holdings and Portfolio Composition

The exposure in 16 stocks remained unchanged, including Bharat Electronics, Cummins India, Solar Industries, MTAR Technologies, Bharat Dynamics, Hindustan Aeronautics, and Mazagon Dock Shipbuilders. The fund’s assets under management grew to ₹7,556 crore as of October 31, 2025, compared to ₹7,024 crore a month earlier.

Performance and Sector Allocation

Launched in June 2023, the fund is benchmarked against the Nifty India Defence TRI index and managed by Rahul Baijal. It delivered 3.90% returns over three months versus 2.21% by the benchmark. In six months, it returned 15.56%, while one-year returns stood at 11.26%. Since inception, it has clocked a robust CAGR of 43.48%.

The fund’s top allocations include Bharat Electronics (18.51%) and Hindustan Aeronautics (13.94%). Sector-wise, 59.30% of assets are in capital goods, 15.31% in chemicals, and 14.97% in automobiles and ancillaries.

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Conclusion

HDFC Defence Fund’s October moves reflect a strategic rebalancing toward core defence and manufacturing players. While it trimmed positions in select engineering names, its increased stake in Bharat Forge and Eicher Motors underscores a continued focus on India’s defence-driven industrial growth.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a private recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.