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GRSE, BDL among 9 defence stocks up over 70% in 2 mths; time to book gains?
Shares of Indian defence-related companies have witnessed a spectacular bull-run on the BSE and the NSE in the last two months, with the success of ' Operation Sindoor ' adding fire-power to already pumped-up shares in the month of May. The NSE Nifty Defence index has zoomed as much as 59 per cent from its April 7 low of 5,645 to the current 8,970 levels. In comparison, the NSE Nifty 50 index has gained 14 per cent in the same period. Among the Nifty Defence constituents - 50 per cent of the stocks i.e. 9 out of the 18 defence shares have zoomed more than 70 per cent in the last two months, shows ACE Equity data. Garden Reach Shipbuilders & Engineers (GRSE) is the top mover, the stock has soared 138 per cent. It is followed by Data Patterns (India), which has zoomed 114 per cent. Paras Defence And Space Technologies, Astra Microwave Products, Mishra Dhatu Nigam (Midhani), BEML, Bharat Dynamics (BDL), Cochin Shipyard and Solar Industries India are the other 7 stocks, up in the range of 70 - 98 per cent. Given the recent sharp rally, analysts recommend it won't be a bad idea to take home some profit off the table, but remain optimistic of the future growth prospects. Kranthi Bathini, director - equity strategy at WealthMills Securities says that defence stocks seem to be fully priced-in at current levels; hence taking some profits from the medium-to-short term seems advisable. On the downside, these stocks could correct between 15-20 per cent, the analyst said. However, the long-term outlook for defence stocks remains upbeat given India's focus on domestic manufacturing, coupled the with export market. The order book and earnings visibility looks very good for these companies, Kranthi added. That apart, post Operation Sindoor, analysts believe the Indian government may increase Budget outlay for the defence sector. Reports indicate that India's defence budget may receive an additional allocation of ₹50,000 crore under a supplementary budget. In the Union Budget presented on February 1, Finance Minister Nirmala Sitharaman had earmarked a record ₹6.81 trillion for the defence sector for FY26, an increase of 9.2 per cent when compared to the budget allotment of ₹6.22 trillion in FY25.
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