
Investor interest in defence stocks soars amid India-Pak military conflict
Renewed India-Pakistan tensions have sparked investor interest in Indian defence stocks, with companies like Cochin Shipyard and Bharat Dynamics seeing significant gains. Anticipation of increased defence spending and potential export opportunities are driving this surge. While long-term prospects remain strong, some fund managers caution about the current elevated valuations and the pace of the rebound.
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
Mumbai: The India-Pakistan military conflict has reignited investor interest in some of the country's largest defence companies.Shares of Cochin Shipyard Mazagon Dock Shipbuilders , and Paras Defence and Space Technologies surged between 10% and 35% since April 22-when the terrorist attack in Pahalgam happened, leading to the fighting between India and Pakistan. Nifty India Defence index went up nearly 13% as investors bet that the government may look to boost defence spending again."Post the recent cross-border tension between India and Pakistan, defence stocks moved in anticipation that India will have to not only replenish its inventory of equipment but also order new ones to keep up its technological edge," said Mahesh Patil, CIO, Aditya Birla Sun Life AMC "Owing to this, the likelihood of an increase in defence budget could rise faster over the next few years. In addition, it could also open an opportunity for India to export some of the equipment."Analysts said defence companies have enough on their plates. Antique Stock Broking said between FY22 and FY25, the Defence Acquisition Council (DAC) cleared military procurements worth ₹8.45 lakh crore, which is 3.3 times the value approved three years ago. The brokerage said these approvals are expected to convert into actual orders and business opportunities by FY26 and FY27.The government's focus on the sector resulted in one of the strongest rallies in shares of defence companies, with the Nifty Defence index shooting up about 350% between July 2022 and July 2024, when these shares peaked out. Subsequently, the index fell 38% till February-end amid the risk-off sentiment in Indian equities that hit the best performers in the previous years the most.Though the sector prospects remain strong, fund managers are wary about the pace of the rebound in these shares."While the long-term structural opportunity in the sector remains intact, there is a disparity between current elevated levels and short-term fundamentals," said Patil. Umeshkumar Mehta, CIO, Samco Mutual Fund, said better visibility on the government's focus on the sector is keeping the valuations elevated for the sector."In the near term, there might be a sharp elevation in terms of stock prices, but in the longer term, the sector is bound to deliver earnings growth considering the focus of the government in the sector," said Mehta.Antique continues to be positive on Mazagon Dock and Garden Reach Shipbuilders & Engineers (GRSE). On Cochin Shipyard , it said, "The stock price outlook for Cochin Shipyard is closely tied to the ordering of an aircraft carrier (IAC-II) on which there is lack of consensus over the urgency and size of the vessel, driving us to temper our stance on the stock."
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)

Business Standard
10 minutes ago
- Business Standard
Digi Yatra to expand to 15 more airports in India, says Siddharth Verma
Digi Yatra, an initiative co-ordinated by the civil aviation ministry to ensure seamless travel for passengers from the airport gates to boarding a flight, will be available in 15 more airports this fiscal, Siddharth Verma, head of IT operations at Digi Yatra Foundation, said. "All the metros are done and all the big airports are done. So now we are left with the smaller airports where the ministry evaluates if there is a need at all or not. Because at times you don't need such solutions if the volume is very low, or there is just one gate," he told Business Standard. Five of the new airports include Mangalore, Trivandrum, Srinagar, Chandigarh, and Nagpur. The rest are managed by the Airports Authority of India (AAI), whose infrastructure is ready but where technology integration is still under way. India has 24 of its major airports covered under Digi Yatra, covering nearly 90 per cent of outbound passenger traffic, Verma added. The upcoming airports in Navi Mumbai and Noida are not part of the 15, he clarified. Digi Yatra's technology, launched in 2022, has revolutionised travel across Indian airports through the implementation of self-sovereign identity or decentralised ID, which allows users to control their online information. Authentication is done through two documents: the Aadhaar and the boarding pass. To date, the app has been downloaded 14 million times and has facilitated more than 56 million journeys across Indian airports. 'It should be like a walk in the park, a kind of experience where nobody should ask for your documents. You just show your face and keep walking through the touchpoints seamlessly and don't have to exchange your documents with anyone.' The Digi Yatra app is linked with the UIDAI ecosystem. When a passenger downloads the app, fills in the required details — including the Aadhaar number — and receives an OTP to authenticate, UIDAI sends the Aadhaar details to the phone. 'Then your proof of presence is established by taking your selfie and matching it with the image on your Aadhaar. These two must match. We then create a verified credential (VC), which is like a digital photocopy with a digital stamp called proof value. This proof value, along with the ID document, is stored in the Digi Yatra wallet on the user's phone until it is deleted by the user.' Even with Aadhaar, Digi Yatra follows what Verma terms data minimisation. Only the passenger's name, gender, date of birth, and masked Aadhaar number are taken. 'Your address is not pulled because it is not required for this use case. Privacy by design means data minimisation must be embedded at the core.' The second step involves uploading the boarding pass. The technology pulls data from the QR code, including date of travel, name, seat number, PNR, origin, destination, and sequence number. 'When you link your boarding pass, we match the name linked earlier from your Aadhaar with the name on the boarding pass. If these match, along with the real-time facial image clicked at the airport, the gate opens. All this happens automatically. There is no human intervention,' Verma explains. Asked about data security concerns, he said data shared with the origin airport is deleted from Digi Yatra's biometric gallery within 24 hours of flight departure. 'The data becomes instantly obsolete. That's how the architecture is designed. Airports also cannot retain the data as per policy.' Digi Yatra also conducts annual audits at the enabled airports to ensure compliance with these policy guidelines and verify that systemic scripts are in place. 'Some airports delete it within four hours, some within five. Others delete it as per the policy required by the CISF and other security agencies.'
&w=3840&q=100)

Business Standard
24 minutes ago
- Business Standard
Indian hospitality sector growth set to normalise in FY26, says Icra
Growth in the Indian hospitality sector is expected to normalise in the current financial year (FY26), with revenue growth for listed companies projected to moderate to 6–8 per cent. This comes after three consecutive years of double-digit revenue expansion from FY23 to FY25. 'We estimate pan-India premium hotel occupancy to hold at 72–74 per cent in FY26, slightly higher than the 70–72 per cent levels witnessed in FY24 and FY25. Average room rates (ARRs) for premium hotels are projected to rise to ₹8,200–8,500 in FY26, up from ₹8,000–8,200 in FY25,' credit rating agency Icra said in a note on Monday, revising the sector outlook to 'stable' from 'positive'. Listed hospitality companies such as Indian Hotels Company Ltd (IHCL), the parent of the Taj brand, and mid-scale player Lemon Tree Hotels, expect to sustain double-digit growth in FY26 while carrying out upgrades across select properties. 'We expect to deliver strong growth with sustained margins and continued portfolio expansion. We're targeting the opening of 30-plus hotels in FY26 — three of which will be on our balance sheet. We are well on track to achieve our guidance of double-digit growth,' said Puneet Chhatwal, managing director and chief executive officer of IHCL, in a post-earnings call after announcing March quarter results last month. Despite the lower revenue growth forecast, companies are expected to report stable operating margins of 34–36 per cent in FY26, supported by cost rationalisation and asset-light expansion strategies adopted in recent years. 'However, within the sample, performance is likely to be mixed, depending on renovation schedules and rising employee expenses amid growing demand,' the Icra note said. IHCL spent over ₹1,000 crore in FY25 towards capital expenditure, with half allocated to renovations, routine maintenance, and digital initiatives. For FY26, the company has earmarked over ₹1,200 crore for capital expenditure. 'Of the ₹1,200-odd crore, a large portion is planned for major renovations at assets such as Taj Palace in Delhi, Fort Aguada in Goa, St James in the UK, and Taj Kolkata. Overall, around 60–65 per cent of the capex will go toward renovations and digital investments,' Chhatwal said during the analyst call. At Lemon Tree Hotels, ongoing renovation expenses are expected to temporarily impact gross ARR and occupancy. 'The timely completion of renovation activities in the owned portfolio will further improve gross ARR and occupancy. Increased investment in renovation will continue through FY26 and into early FY27, by which time our entire owned portfolio — about 6,000 rooms — will have been fully renovated. Post that, renovation expenses will stabilise at 1.5–1.7 per cent of revenue on an ongoing basis,' said Patanjali Keswani, chairman and managing director of Lemon Tree Hotels, after the company's March quarter results.


Time of India
26 minutes ago
- Time of India
gic: Cred secures $72 million from GIC, other existing investors at lower valuation of $3.5 billion
ADVERTISEMENT ADVERTISEMENT Fintech major Cred has raised Rs 617 crore ($72 million) in a fresh funding round at a valuation of $3.5 billion, according to filings seen by was done at a lower valuation compared to $6.4 billion, at which the startup was valued in 2022 during its last major fund infusion. ET had reported about this round being in the works on April in the know had told ET then that the reduction in valuation was in line with the company's plans for a potential public listing in India over the next two to filings with the ministry of corporate affairs, Cred has received Rs 354 crore from Lathe Investment, which is wholly owned by Singapore's sovereign fund GIC . It also received an infusion of Rs 74 crore from RTP Global, Rs 25.8 crore from Sofina Ventures, and Rs 162 crore from Kunal Shah 's family office, QED Innovation Labs. The entire infusion is in the form of primary capital, which means no existing investor has sold any shares in this company did not share a had also led its last major fund infusion in 2022 when the company had raised $140 million in a mix of primary and secondary capital at a valuation of $6.5 billion. Some of the other major investors in Cred are Tiger Global, Peak XV Partners, and DST Global. Cred closed FY24 with revenue of Rs 2,473 crore, up 66% from the previous year, and reported an operating loss of Rs 609 crore, down from Rs 1,024 crore a year company is building a financial services business on top of its core credit card bill payment operations. It offers unsecured consumer loans and secured credit products like loans against mutual funds. It has helped its lending partners create a loan book of Rs 15,000 crore. Cred is also building its insurance play through a vehicle management platform, Cred Garage, which is currently managing around 11 million round comes close on the heels of another fintech, Groww, closing a major pre-IPO funding round, which was also led by GIC. The company is in the final stages of closing a $200 million fund infusion, which would value the wealth-management platform at around $6.5 billion. Along with Groww , the Indian fintech ecosystem is looking forward to a bunch of major public listings over the next one to two years. Pine Labs, one of the largest merchant payment companies, is set to file its draft red herring prospectus (DRHP) with the market regulator Sebi over the next few days, followed by PhonePe , which is planning to file its DRHP in the second half of this year. Razorpay recently completed its reverse flip to India and also converted into a public company ahead of its planned IPO in 2026.