Defence Stocks Soar as India-Pakistan Tensions Escalate
Soldiers of #PantherDivision and the #IAF hone drills and procedures for Special Heliborne Operations. (Image credit Indian Army)
Defence Stocks Soar as India-Pakistan Tensions Escalate After Pahalgam Attack
By S Jha
Mumbai, April 29, 2025 — Indian defence stocks surged on Tuesday amid rising India-Pakistan tension. A secular rally in the defence stocks sent scrips soaring on Tuesday.
Top five gainers in the stock market hailed from the defence sector on Tuesday. The frenetic rally was led by two shipyard firms – Garden Reach Shipyard and Mazagaon Dock Shipyard. They were trading with gains of more than 13 per cent each on Tuesday afternoon.
The steep rally in the defence stocks sent the shares of Mazagaon Dock Shipyard trading at all-time high. Shares of Cochin Shipyard were also trading with gains of almost 10 per cent.
Shares of Paras Defence gained another 13 per cent on Tuesday. The scrip is reacting to the newsbreak that the board meeting will soon decide on stock split.
The gains in the defence stocks came in the aftermath of heightened geopolitical tensions with Pakistan following a deadly terror attack in Pahalgam, Jammu and Kashmir, which killed 26 tourists on April 22.
Meanwhile, broader indices were choppy in trades. Nifty50 and Sensex were trading flat to positive solely because of extended rally in the stock of Reliance Industries post Q4 FY25 Results announcement.
Market analysts attribute the rally to expectations of increased defence spending and a ₹63,000-crore Rafale-M fighter jet deal with France, amid ceasefire violations along the Line of Control (LoC).
Data Patterns (India) and Hindustan Aeronautics (HAL) also saw gains in extended rallies in their counters. Bharat Electronics (BEL) also was trading with strong gains on Tuesday.
@Sheru_Katte on X highlighted the strong price action in HAL, BEL, Mazagon Dock, and Cochin Shipyard, noting, “Defence stocks are showing excellent momentum in the rising market.”
The rally follows India’s stern response to the Pahalgam attack, including suspending the Indus Water Treaty, closing the Attari-Wagah border, and expelling Pakistani military advisors. Defence Minister Rajnath Singh briefed Prime Minister Narendra Modi on security measures, while India’s navy test-fired missiles to demonstrate “long-range, precision offensive” capabilities, per The Guardian.
The anticipated Rafale-M deal for 26 jets to equip INS Vikrant further fueled investor optimism. Vikas Gupta, Founder of OmniScience Capital, posted on X, “In the backdrop of a potential India-Pak war, it’s not surprising that defence stocks are rallying. Even a limited conflict could drive significant orders.”
He emphasized demand for equipment, logistics, and supplies. Kranthi Bathini of WealthMills Securities added, “Given the government’s thrust on defence and strong order books for GRSE, Mazagon Dock, HAL, and BEL, these stocks are expected to perform well.”
Disclaimer: This article makes no recommendation for buy or sell of shares of any company.
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