BEML, Cochin Shipyard, other defence stocks surge up to 5%: Key triggers at play

Defence stocks

The shares of leading defence companies surged on September 2, as investors rotated money into the sector, tracking fresh developments around Centre's Make in India push.

The sharp rise in the share prices pushed the Nifty India Defence index up 1.6 percent in the afternoon.

PM Modi's Stance at SCO

While addressing the Shanghai Cooperation Organisation (SCO) summit, Prime Minister Modi on September 1 issued a strong statement against terrorism and said, "India took the initiative to fight Al Qaeda and the terrorist organisations associated with it by leading the Joint Information Operation. We raised our voice against terror financing. I express gratitude for your support in it."

The remarks conveyed a strong stance against terror, which is being seen as a positive for equipment suppliers.

"We have to say clearly and unanimously that no double standards are acceptable on terrorism. This attack (Pahalgam) was an open challenge to every country and person who believes in humanity. In such a situation, it is natural to raise the question of whether the open support of terrorism by some countries can be acceptable to us. We have to unanimously oppose terrorism in every form and colour. This is our duty towards humanity," Prime Minister added.

Made in India Sukhoi Su-57?

Russia is currently studying a possible investment the make its fifth-generation stealth fighter jet, the Sukhoi Su-57, in India, ANI reported, citing defence sources. This comes after PM Modi met Russian President Putin at the SCO Summit in Taiwan.

Hindustan Aeronautics (HAL) currently makes the Russian origin Su-30 MKI fighter jets at its Nashik facility, which if required, can be used for the Su-57 jets, the report added. India's defence manufacturing capabilities will get a significant boost if the jet production is shifted to the country.

Moneycontrol couldn't independently verify the report.

Value Buying

The sharp rise in defence stocks has come after a sizeable correction. Following ‘Operation Sindoor’, defence stocks had tumbled over concerns around elevated valuations.

BEML shares were the top gainer on the index, jumping more than 4 percent to trade at Rs 4,057 apiece. Cochin Shipyard shares meanwhile gained nearly 4 percent.

Mazagon Dock Shipbuilders jumped nearly 3 percent, while Garden Reach Shipbuilders (GRSE) and Data Patterns shares rose around 2 percent each. Bharat Dynamics (BDL), Paras Defence, Bharat Electronics (BEL) and Hindustan Aeronautics (HAL) shares rose around 1 percent each.