Defence stocks set to rally on export hopes amid rising India-Pakistan tensions: Ashika Equity

Time of India

09-05-2025

Indian
defence stocks
are poised to benefit from a surge in both domestic and international demand, brokerage
Ashika Institutional Equity
said, citing a favourable backdrop of heightened geopolitical activity, expanding order books, and growing export potential following India's assertive display of military capabilities in the ongoing conflict with Pakistan.
The brokerage is bullish on select domestic manufacturers, including Data Patterns,
Bharat Electronics
(BEL), Mazagon Dock, Garden Reach Shipbuilders,
Zen Technologies
,
Paras Defence
, and
Hindustan Aeronautics
(HAL), which it says are well-positioned to benefit from an expanding order book.
The year 2025 is shaping up to be a year of reforms for the defence sector, Ashika Equities said, pointing to India's demonstrated strength in next-generation stand-off warfare and the integration of advanced systems such as AI and robotics. The brokerage said both public sector undertakings and private manufacturers stand to gain—PSUs from rising domestic procurement, and private players from increasing global interest.
India's recent military actions, including precision strikes on terror camps in Pakistan and Pakistan-occupied Kashmir, have not only showcased indigenous systems like the Akash missile platform and the INS Vikrant aircraft carrier but also exposed vulnerabilities in Chinese-supplied hardware used by Pakistan.
'Operation Sindoor delivered a resounding blow to the credibility of Pakistan's Chinese-supplied air defence systems and, by extension, to Beijing's claims of military superiority,' said Krishna Doshi, Defence Analyst at Ashika Institutional Equity, adding that this could unlock new export opportunities for Indian companies.
Defence Minister Rajnath Singh, in a recent briefing, reiterated India's export target of Rs 500 billion by FY29—more than double the current Rs 240 billion—with the ambition of becoming the world's top defence exporter by 2047.
Defence stocks surged on Friday, with Paras Defence leading the gains with a 7.5% jump to an intraday high of Rs 1,463, followed by BEL, which rose 4.9%, and HAL, which climbed 3.6%.
Bharat Dynamics
and
Bharat Forge
gained 3.5% and 5.6%, respectively.
The rally comes amid reports that the Modi government has summoned key defence manufacturers to Delhi next week to discuss ramping up production. Bharat Forge Chairman Baba Kalyani confirmed the meeting in comments to CNBC TV18, though declined to elaborate.
The stock movement tracks developments in the region following India's strikes earlier this week that eliminated nine terror camps. In retaliation, Pakistan launched loitering munitions and resumed missile attacks across the Line of Control, all of which were intercepted by India's air defence systems. Explosions were reported as drones were neutralised across Jammu and Kashmir, while blackouts were enforced in multiple districts, including Bikaner and Jalandhar.
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Defence stocks rally up to 4% as India-Pakistan tensions flare
Ashika Equities also pointed to global defence spending as a long-term positive for Indian exporters. NATO's planned EUR 800 billion outlay over the next 3–4 years and the recent Rs 630 billion Rafale-M deal between India and France—under which local firms will manufacture key components—underscore the opportunity for Indian players, particularly those in the private sector which already account for 60–65% of defence exports.
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