Defence sector stocks rose sharply for the sixth consecutive session on Friday, with Cochin Shipyard, Mazagon Dock Shipbuilders and Bharat Electronics Ltd (BEL) among the top gainers, as investors cheered the government’s renewed thrust on indigenous defence manufacturing.
The Nifty India Defence index hit a fresh 52-week high during the session today, rising up to 20 percent since May 9. All 18 constituents of the index were trading in the green on Friday, with several stocks climbing as much as 15 percent intraday.
The rally comes in the backdrop of Prime Minister Narendra Modi’s recent pitch for home-grown military capabilities. "India has showcased its excellence in new-age warfare. The time has come for 'Made in India' defence equipment," PM Modi said earlier this week, signalling further policy support for local defence manufacturing under the Make in India initiative.
Investor sentiment was also buoyed by reports that over a dozen countries have shown interest in acquiring the BrahMos missile system, reported News18.
The supersonic cruise missile recently played a key role in Operation Sindoor, delivering precision strikes in the wake of the Pahalgam terror attack. The operation has been viewed as a demonstration of India’s growing strategic and technological prowess.
Cochin Shipyard led the gains in Friday’s trade, soaring 13.54 percent to an intraday high of Rs 2,057.50 on the NSE. However, analysts at Kotak Institutional Equities flagged valuation concerns, noting the stock may see a sharp correction of nearly 60 percent from current levels.
"Ship repair orders for INS Vikrant and Vikramaditya have supported performance, but these are one-off contracts. The absence of long-term naval orders remains a key risk," the brokerage said in a note dated May 16.
Garden Reach Shipbuilders & Engineers rose 11.84 percent to Rs 2,526.40. The stock has gained nearly 40 percent in the last six sessions.
Mazagon Dock Shipbuilders touched a new 52-week high of Rs 3,491.90, climbing 9.72 percent intraday. The stock has risen around 19 percent over the last four sessions.
Among other gainers, BEL—a Nifty50 constituent—hit a fresh 52-week high of Rs 363.70, up 3.8 percent. Bharat Dynamics advanced 7.31 percent to Rs 1,938.60, also touching a new high.
Hindustan Aeronautics Ltd and Paras Defence and Space Technologies were up between 5 to 6 percent during the session.
Commenting on the sector-wide rally, Dr. Manoranjan Sharma, Chief Economist at Infomerics Valuation and Ratings, said: "With India achieving all its strategic objectives, Operation Sindoor has been an unequivocal success. It showcased India’s growing technological self-reliance. Defence stocks such as Cochin Shipyard, Paras Defence, Mazagon Dock, Bharat Dynamics, BEL and HAL have surged post-operation, reflecting market confidence in India’s indigenous defence capabilities."
Market participants expect the momentum in defence stocks to continue in the near term, driven by strong order visibility, rising exports, and strategic policy support from the government.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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