HAL, BEL, Bharat Dynamics: Defence stocks rally up to 7% amid Indo-Pak tensions
Escalating tensions with Pakistan have sparked a sharp rally in defence stocks, with investors rushing to price in a potential surge in demand for defence equipment and systems. Shares of Hindustan Aeronautics (HAL), Bharat Dynamics (BDL), Bharat Electronics Ltd (BEL), and Paras Defence jumped between 2 and 7% in Friday's trade, outperforming a jittery broader market shaken by geopolitical uncertainty.The surge follows India's precision missile strikes on nine identified terror hubs in Pakistan and Pakistan-occupied Kashmir (PoK), carried out in retaliation for the Pahalgam terror attack that killed 26 civilians. As tensions escalated between India and Pakistan, shares of defence companies such as Bharat Forge, Paras Defence, BEL and HAL were among the top movers on the BSE, with strong interest also seen in Mazagon Dock Shipbuilders, Cochin Shipyard, BEML, and Data Patterns.The rally comes amid reports that the Modi government has called top defence manufacturers to Delhi next week, possibly to discuss scaling up production readiness. 'We've been called to Delhi next week. Our team is going. I can't say more,' Bharat Forge Chairman and MD Baba Kalyani told CNBC-TV18, fuelling further speculation around a rapid push for defence readiness.Brokerages have already been bullish on the sector. Nuvama recently projected a $130 billion defence opportunity over the next five years, with the Air Force and Navy accounting for the bulk of upcoming capex.HAL's LCA Tejas and Sukhoi upgrade programs, BDL's missile systems including Akash and Astra, and BEL's radar and electronic warfare offerings are expected to see renewed government orders as part of India's ongoing military modernisation drive.The Indian defence budget for FY26 stands at Rs 6.81 lakh crore, with Rs 1.8 lakh crore earmarked for capital expenditure. With fresh tensions on the border and cross-border strikes back in the spotlight, investors appear confident that these budget allocations may be revised upward or fast-tracked.Meanwhile, tensions remain high across the Line of Control. Pakistan retaliated with missile and drone attacks late Thursday, prompting India to activate its air defence systems. Explosions were reported in parts of Jammu and Kashmir as drones were intercepted mid-air. Sirens and blackouts were imposed in border towns across Punjab and Rajasthan as civilians scrambled for cover.International reactions have been cautious. US Vice President JD Vance ruled out direct involvement, saying Washington would not intervene in 'a war that's fundamentally none of our business,' but urged both nations to pursue de-escalation.advertisement(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
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