A wide range of defence-related shares posted strong gains on May 12, racing ahead of the benchmark indices riding on renewed optimism after truce on the western border and sustained foreign inflows. The defence plays were also supported by comments on military preparedness by the DGMO during a press briefing, extending gains in select stocks.
While the Nifty India Defence index closed with modest gains of about 0.7 percent, shares of Zen Tech, BEML, BEL, BDL and Cyient DLM saw strong buying interest.
Cyient DLM shares jumped over 6 percent while Zen Technologies jumped 5 percent to hit the upper circuit. BEML shares gained nearly 5 percent, while Cochin Shipyard shares were up nearly 2.5 percent. Bharat Electronics (BEL) and Bharat Dynamics (BDL) shares rose over 2 percent apiece, while those of Garden Reach Shipbuilders and Engineers (GRSE) and DCX India shares rose nearly a percent.
Some names saw profit taking, with Mazagon Dock Shipbuilders in the red, and while Hindustan Aeronautics shares fell nearly 1.5 percent, shares of Paras Defence tumbled nearly 6 percent.
During a joint briefing by the DGMOs on May 12, the assurance that Indian armed forces are prepared to take up future missions 'should the need arise', supported investor sentiment in some of the defence plays. Air Marshal AK Bharti has said, "All military bases & systems fully operational. We are ready to undertake future missions." He said, adding, "Our battle-proven systems stood the test of time and take them head on. Another highlight has been the stellar performance of the indigenous air defence system, the Akash system. Putting together and operationalising the potent AD environment has been possible only because of budgetary and policy support from the government of India in the last decade."
Bharat Dynamics is one private sector entity that has received the order to manufacture the Akash missile system.
India's defence exports has risen to a record high of Rs 23,622 crore in FY25, which is a growth of 12 percent on year. Defence Minister Rajnath Singh has already underscored the target of increasing defence exports to Rs 50,000 crore by 2029.
"The Sensex jumped over 2,700 points today after news of the ceasefire brought much-needed relief to investors. India’s calm but strong response signalled that the government is focused on maintaining stability. The country’s ability to intercept and defend against every strike has reinforced confidence in its defence preparedness, giving investors added assurance," said Mayank Mundhra from Abans Financial Services.
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