Defence stocks surge amid India-Pakistan border tensions; Paras Defence, BEL gain up to 10%

Defence stocks surge amid India-Pakistan border tensions.

Defence stocks rallied sharply on Monday as escalating tensions between India and Pakistan, following a terror attack in Jammu and Kashmir's Pahalgam, led to a strong buying interest across the sector.

The Nifty Defence index jumped 4.5 percent, marking its strongest intraday gain since April 15, 2025. Seventeen of its eighteen constituents were trading in the green, with Paras Defence and Space Technologies, Garden Reach Shipbuilders & Engineers, and Data Patterns (India) leading the pack.

Shares of Paras Defence surged 11.66 percent to touch an intraday high of Rs 1,167 on the NSE. Also, the company, in a filing on Friday, said its board will meet on April 30 to consider a stock split, approve audited financial results for FY25, and recommend a dividend.

Garden Reach Shipbuilders rose 9.17 percent, while Data Patterns gained 8.17 percent.

Bharat Electronics Ltd (BEL), another major player, climbed 3.28 percent to an intraday high of Rs 307.35, becoming the second biggest gainer on the Nifty50 after index heavyweight Reliance Industries.

The sharp rally came amid reports that Defence Minister Rajnath Singh had briefed Prime Minister Narendra Modi on the security situation in Jammu and Kashmir. The briefing, lasting around 40 minutes, comes as New Delhi explores retaliatory measures following the attack that killed 26 tourists on April 22.

India, citing "cross-border linkages" to the incident, has vowed severe action against those responsible. On Sunday, Prime Minister Modi said the "perpetrators and conspirators" would face the "harshest response".

Adding to the sentiment, India and France signed a mega Rs 63,000 crore deal to buy 26 Rafale Marine aircraft for the Indian Navy.

Vikas Gupta, smallcase Manager and Founder at OmniScience Capital, noted that in the backdrop of a potential India-Pak war it is not surprising that the Defence stocks are rallying. In the case of a war, even if limited to 2-4 weeks, the demand for defence equipment, including arms, ammunition and weapons, could be substantial and result in significant orders to Defence companies.

"As we have mentioned before, the military runs on many things beyond weapons, such as logisitics, food, clothing and basic supplies and all of these would also be need to be replenished and kept supply ready. In the light of above it is not surprising that defence stocks are rallying. The need for a much heightened focus on defence for India, and potentially, to significantly increase the defence budget for the long term has been highlighted by the current situation," he added.

The only laggard in the Nifty Defence index was Unimech Aerospace and Manufacturing Ltd, which slipped nearly 3 percent.

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