Defence stocks such as Bharat Dynamics, BEL, and HAL are surging amid rising India-Pakistan tensions, as investors expect increased demand for military equipment following recent attacks.
Defence stocks in India have seen a significant surge in share prices due to heightened tensions between India and Pakistan. Companies like Bharat Dynamics, BEL (Bharat Electronics Limited), and HAL (Hindustan Aeronautics Limited) have experienced a noticeable rally, reflecting investor expectations for increased demand for military equipment.
Bharat Dynamics, a leading manufacturer of ammunition and missile systems, has risen by 5% in intra-day trade, while BEL and HAL are up by over 2%. Additionally, ship-builder stocks like Mazagaon Dock and Garden Reach are also seeing gains.
Harshit Kapadia, Vice President & Defence Sector Expert at Elara Securities, attributes this rise to the recent escalation in India-Pakistan tensions, particularly after Pakistan’s offensive on Indian cities last night. Kapadia noted that the anticipation of higher demand for military products such as explosives, arms, ammunition, bulletproof jackets, drones, and counter-drone systems is driving the stock price increases. He also highlighted that some items may need to be imported to meet the demand.
The growing demand for military equipment is further supported by reports of drone and missile activity across Jammu, Rajasthan, Gujarat, and Punjab, which led to precautionary blackouts and high alert at airports across India. The successful thwarting of these attacks by India’s armed forces has further amplified expectations for increased defence orders.
Bharat Dynamics, in particular, is also gearing up to expand its overseas presence. The company is considering setting up offices outside India, and its order pipeline for the next two to three years is valued at over ₹20,000 crore, adding to the optimism around the company’s future growth.
As the situation continues to unfold, defence stocks are likely to remain in focus, with investors eyeing further developments in the India-Pakistan conflict and the potential for additional defence procurement.
