The shares of defence companies significantly tumbled in the second half of the day, as tensions between India and Pakistan escalated. The companies erased early gains, pushing the Nifty India Defence Index down by nearly one percent.
The Indian government announced that Pakistan attempted strikes on Indian military installations using drones and missiles overnight, but were neutralised. The targeted cities included Srinagar, Jammu, Amritsar, Jalandhar, Ludhiana, Chandigarh and more. Indian Armed Forces then targeted air defence radars and systems at multiple locations inside Pakistan, and an air defence system positioned in Lahore was successfully neutralised.
The rising escalations between the two countries pushed the markets down, with defence stocks being no exception. DCX India was the top loser on the index, dropping over 4.4 percent to close at Rs 269 apiece. BEML and Zen Technologies shares meanwhile closed over 3 percent lower.
Garden Reach Shipbuilders and Engineers (GRSE) shares fell over 2 percent, while Hindustan Aeronautics (HAL), Bharat Electronics (BEL), Paras Defence and Cochin Shipyard fell over 1 percent each.
Bharat Dynamics (BDL) and Mazagon Dock Shipbuilders shares however closed in the green with marginal gains.
Also Read: Our LIVE blog on India-Pakistan News
The shares had seen a surge early on May 7 as well, in anticipation of rising hostilities following India’s overnight precision strikes across the LoC and parts of the international border. However, later the stocks pared gains on profit booking and hopes of de-escalation between the two neighbours.
The domestic defence manufacturers has seeing strong investor interest and a robust orderbook on the back Centre's push for indigenization and modernization of armed forces. In a recent note, Antique Broking has come out with a bullish stance on the sector, calling defence stocks reasonably valued after correction.
India's defence exports had surged to a record high of Rs 23,622 crore in the financial year 2025. Moreover, the government is planning to raise exports to Rs 50,000 crore by 2030, Union Defence Minister Rajnath Singh had said earlier this year.
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