Defence stocks in India surged on June 23, 2025, following rising tensions in the Middle East as the US launched missile strikes on Iran. Shares of companies like Apollo Micro Systems and ideaForge Technology rallied sharply amid expectations of increased defence spending.
Shares of Hyderabad-based Apollo Micro Systems and Mumbai-based ideaForge Technology surged up to 8% on Indian stock exchanges as defence sector optimism rose following heightened geopolitical tensions in the Middle East. The rally followed missile strikes launched by the United States on Iran, intensifying the ongoing Israel-Iran conflict.
The Indian defence sector, already buoyed by strong March quarter earnings and policy support under the Make in India initiative, witnessed strong investor interest. Major gainers included Apollo Micro Systems, which develops electronic and electromechanical systems for aerospace and defence, and ideaForge Technology, a leading manufacturer of unmanned aerial vehicles (UAVs) for surveillance and security.
Stocks of Swan Defence and Heavy Industries, Avantel, Paras Defence & Space Technologies, and Premier Explosives also saw gains between 2% and 5%. Others such as Astra Microwave, Garden Reach Shipbuilders & Engineers, DCX Systems, Mazagon Dock Shipbuilders, Data Patterns, and Cochin Shipyard rose between 1.5% and 4.9%.
The rally came despite the broader market declining, with the Nifty and Sensex falling over 1% on June 23. Analysts attributed the contrast to growing expectations that the conflict could lead to increased defence orders and budgetary allocations.
The defence sector had already begun recovering in March after months of underperformance due to valuation concerns. The rebound gained momentum during India’s Operation Sindoor, which showcased indigenous defence capabilities through the successful interception of drones and missiles during conflict with Pakistan.
Further support came from Prime Minister Narendra Modi’s reaffirmation of the government’s focus on indigenous defence production. According to ICRA, the sector is expected to grow revenues by 15%–17% in FY2026, supported by a robust order book with an OB/OI ratio of 4.4 times as of FY2025-end.
Despite high valuations, the outlook for defence stocks remains positive as institutional and retail investors continue to bet on strong execution and consistent government policy backing.