Defence stocks witness profit booking despite escalating Indo-Pak tensions

Anirudh Garg, Partner & Fund Manager at Invasset PMS, said that the defence sector in India is experiencing significant growth, primarily driven by the government’s focus on increasing defense spending and indigenizing defence capabilities. Companies such as Bharat Electronics Ltd. (BEL), Hindustan Aeronautics Ltd. (HAL), and Mazagon Dock Shipbuilders are benefiting from large government contracts and expanding order books. For instance, BEL has reported an order book worth over Rs 40,000 crore, and HAL is seeing increasing demand for its aircraft and helicopters.

“Government initiatives like ‘Make in India’ and the push for self-reliance in defense production have created a long-term tailwind for these companies…The outlook for the sector remains positive as India continues to increase its defense budget and modernize its forces. Investors should focus on companies with a solid order book and the capability to execute projects on time,” added Garg.

While defence stocks witnessed profit booking, India’s equity market showed resistance with the benchmark indices – Sensex and Nifty – closing in green. In contrast, the Pakistan Stock Exchange crashed on Wednesday with its benchmark – KSE-30 Index – falling as much as 6%.

“Indian equity markets exhibited strong resilience amid recent Indo-Pak border tensions. The measured market response indicated that geopolitical risks were largely priced in and expectations of de-escalation are prevailing among investors. At the same time, the progress on the India–UK FTA further buoyed investor optimism, driving gains in key sectors such as textiles, automobiles, and information technology,” said Vinod Nair, Head of Research, Geojit Investments.