Defence stocks gain on escalating India-Pakistan tension; Paras Defence, Zen Technologies soar up to 6%

In a recent report, analysts at Nuvama had noted that while the nation’s defence spending of around 2.3 percent of GDP is lower than global defence majors ( around 3–5% of GDP), they expect defence capital outlay to grow 7–8% annually over the next five years

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26 Aug, 2025 12:21

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Defence stocks opened in the green on Friday, May 9, after another day of escalating tensions along the India-Pakistan Border.

On Thursday night, according to government officials, India neutralised Pakistan military's attempt to hit military stations in Jammu, Pathankot, Udhampur and some other locations with missiles and drones. At open the  broader Nifty Defence index also gained nearly 1.28 percent.

At 11.10 am, shares of Paras Defence jumped 6 percent, Hindustan Aeronautics Ltd (HAL) rose around two percent, while Bharat Electronics Ltd (BEL) gained 2.8 percent, Zen Technologies hit its five percent upper circuit.

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On May 8, shares of defence companies tumbled in the second half amidst profit booking with most defence players losing early gains. At close, the Index was down by nearly one percent.

Also read: Samir Arora says war risk a 1% tail event, can’t position for that; India theme strong for foreign investors
Talking to CNBC TV-18 on May 9, Vinit Sambre, Head of Equities, DSP Mutual Fund On CNBC-TV18 noted that the movement in defence stocks was on higher order books & order announcements. He added that commentary from corporates currently is not great due to uncertain environments. Additionally, he noted that defence execution cycles remain long.

In a recent report, analysts at Nuvama had noted that while the nation’s defence spending of around 2.3 percent of GDP is lower than global defence majors ( around 3–5% of GDP), they expect defence capital outlay to grow 7–8% annually over the next five years, "potentially translating to more than $130 billion of procurement given dynamic geopolitical and regional scenarios."

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