
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
19 minutes ago
- Business Standard
Reliance Defence partners Diehl for precision-guided munitions in India
Reliance Defence and Diehl Defence tie up for local production of 155 mm guided munitions in Ratnagiri, with Rs 5,000 crore investment planned over five years Mumbai Anil Ambani's Reliance Defence (R-Defence) has tied up with Germany-based Diehl Defence to produce next-generation terminally guided munitions (TGM) for the Indian armed forces. The partnership with Diehl will drive local production of the Vulcano 155 mm precision-guided munition system, R-Defence stated. As part of the agreement, R-Defence will establish a large, high-tech, greenfield, integrated ammunition and explosive manufacturing facility in Watad Industrial Area in Ratnagiri, Maharashtra. 'This strategic alliance not only accelerates the advancement of India's defence manufacturing capabilities, but also positions Reliance Defence as a pivotal player in the global defence supply chain,' Ambani, founder and chairman of the Reliance Group, said. In May, the company had tied up with another Germany-based defence firm, Rheinmetall AG, to supply the explosives and propellants for medium- and large-calibre ammunition. The facilities for the above-mentioned partnerships in Ratnagiri will be established with an investment of ₹5,000 crore over the next five years, a company source stated. R-Defence is aiming to start manufacturing in the next 18 months, as it has the land and principal approvals for the plant in place. The company aims to fund 30 per cent of the investment via equity and the other 70 per cent via debt. The equity is likely to come from the company's internal cash accruals, the source said. R-Defence aims to be amongst the country's top three private defence exporters in the next 12 to 24 months. It is likely to sign long-term agreements with firms like Diehl and Rheinmetall for 5 to 10 years in the coming months. The partnerships are a part of the company's ammunition-focused strategy, where the products made in India will have 60 per cent indigenous content. It is eyeing the market opportunity to potentially generate ₹10,000 crore in revenue through the development and supply of advanced ammunition systems. This tie-up with Diehl is also Reliance Group's fourth global partnership, expanding upon its established collaborations with Dassault Aviation, Thales Group of France, and Rheinmetall. Additionally, Diehl Defence's product portfolio includes air defence systems, missiles for all branches of the armed forces, and ammunition for the army, air force, and navy, as well as protection systems, generating annual sales of over 2 billion euros.


Time of India
30 minutes ago
- Time of India
IGNOU launches MBA programmes in Hindi and Odia
New Delhi: In a move aligned with National Education Policy (NEP) 2020, Indira Gandhi National Open University (IGNOU) announced the launch of its MBA programmes in Hindi and Odia mediums, with corresponding study materials now available in both languages. This initiative is part of a larger collaboration with All India Council for Technical Education (AICTE) under the E-Kumbh project, a national effort to translate core academic content into twelve Indian languages. Using AICTE's advanced machine translation tool, Anuvadini, IGNOU successfully localised its MBA curriculum to better serve learners who prefer to study in their native languages. The university also plans to roll out MBA programmes in 10 more Indian languages, making a significant stride toward eliminating linguistic barriers in management education. "This initiative marks a milestone in our pursuit of educational equity," said Mrutyunjay Behera, joint secretary, department of higher education, ministry of education. "By offering MBA programmes in regional languages, IGNOU is bringing professional education closer to the grassroots, in full alignment with NEP 2020's emphasis on multilingual and inclusive education. This is more than a policy implementation, it's a cultural transformation in education." by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch vàng CFDs với mức chênh lệch giá thấp nhất IC Markets Đăng ký Undo Professor Uma Kanjilal, vice-chancellor, IGNOU, expressed gratitude to the dignitaries and partners, adding, "Technology is the key enabler here, allowing us to create high-quality educational experiences across languages. Our mission is to ensure that no learner is left behind, regardless of their linguistic background." Dr Abhay Jere, VC, AICTE, emphasised the transformative role of artificial intelligence in education. "We are entering a new era where AI is enabling real-time translation and localisation of content at an unprecedented scale. The Anuvadini tool represents a powerful step in making education truly borderless," he said.


Time of India
33 minutes ago
- Time of India
Robert Vadra skips ED summons in PMLA case linked to Sanjay Bhandari
Robert Vadra , the businessman husband of Congress MP Priyanka Gandhi Vadra , on Tuesday skipped an ED summons for questioning in a money laundering case linked to UK-based alleged arms consultant Sanjay Bhandari , official sources said. The sources said Vadra sought an adjournment of Tuesday's summons, and he will now be given a fresh date. The ED wants to record Vadra's statement under the Prevention of Money Laundering Act (PMLA) and then file a chargesheet against him before the court, sources said. The federal probe agency had questioned the 56-year-old businessman for three consecutive days in April in a separate money laundering case linked to alleged irregularities in a 2008 land deal in Haryana. Bhandari (63) fled to London in 2016, soon after the Income Tax Department raided him in Delhi. Live Events A UK court earlier this month refused an application filed by the Indian government seeking permission to appeal in Britain's Supreme Court against the discharge of Bhandari in an extradition case , virtually ruling out chances of him being brought to the country to face the law. The ED filed a chargesheet in this case in 2023, alleging that Bhandari acquired the 12, Bryanston Square house in London in 2009 and got it renovated "as per the directions of Robert Vadra, who provided the funds for the renovation". Vadra has denied that he owns any London property directly or indirectly. Terming the charges a "political witch hunt", Vadra said he was being "hounded and harassed" to subserve political ends. The ED is also investigating Vadra in a separate money laundering case linked to alleged financial irregularities in a land deal in Rajasthan's Bikaner. The federal probe agency had previously questioned Vadra and his mother, Maureen, in this case.