Daijiworld Media Network - Mumbai
Mumbai, May 11: India’s precision missile strikes on terror camps in Pakistan and Pakistan-occupied Kashmir on 9 May, following the deadly attack in Pahalgam that killed 26 civilians, triggered a sharp rally in defence-related stocks on the Bombay Stock Exchange. As geopolitical tensions escalated, investors flocked to defence companies, anticipating increased government spending and a renewed focus on military preparedness.
While the broader market remained cautious, defence stocks stood out as top performers. Shares of Hindustan Aeronautics Ltd (HAL), Bharat Dynamics Ltd (BDL), Bharat Electronics Ltd (BEL), and Paras Defence saw gains ranging from 2% to 7%. Other companies like Cochin Shipyard, Mazagon Dock Shipbuilders, Data Patterns, and BEML also attracted strong investor interest.
Investor sentiment was further buoyed by reports of an urgent defence production review in New Delhi. Bharat Forge Chairman and Managing Director Baba Kalyani confirmed that defence manufacturers had been summoned to the capital next week, hinting at a possible scale-up in manufacturing capabilities and production planning.
Analysts expect a direct impact on major defence programs, including HAL’s Tejas fighter jets and Sukhoi Su-30MKI upgrades, BDL’s Akash and Astra missile systems, and BEL’s radar and electronic warfare products. With the FY26 defence budget already set at Rs 6.81 lakh crore, including Rs 1.8 lakh crore allocated for capital expenditure, experts predict a potential revision to further boost India's defence infrastructure. Brokerage firm Nuvama projects a $130 billion defence opportunity over the next five years, with significant investment expected for the Air Force and Navy.
Meanwhile, the situation on the ground remains tense. In response to India's Operation Sindoor, Pakistan launched drone and missile attacks targeting at least 15 Indian cities. These were successfully intercepted by India’s Integrated Counter-UAS Grid and air defence systems. In a counter-retaliation, Indian forces struck Pakistan’s HQ-9 air defence installations in Lahore.
Amid this exchange, civilians in Punjab and Rajasthan were subjected to air raid sirens and blackout protocols, underscoring the seriousness of the threat. Despite the volatility, defence stocks continued to climb, driven by the belief that national security would drive future capital flows and policy decisions. Kotak Securities pointed out that a similar pattern was seen following the 2016 surgical strikes and the 2019 Balakot airstrikes, when defence stocks rallied while broader indices faced temporary instability.
IdeaForge Technology Ltd, a prominent Indian drone manufacturer, is also expected to remain in focus as drone-based surveillance and security gain strategic prominence along India’s borders.
As the central government gears up for critical discussions with top defence manufacturers in the coming week, both markets and defence watchers await signals on how India plans to scale up its defence posture—militarily and economically.