Operation Sindoor: What's next for Indian defence stocks?
The defence sector has come into sharp focus following India's retaliatory attacks targeting terrorist infrastructure in Pakistan and Pakistan-occupied Jammu and Kashmir early Wednesday.
As during any crossborder conflict, the escalating tensions between the nuclear-armed neighbours are expected to boost earnings for domestic defence companies. A strong and resilient export outlook further strengthens the sector's prospects, said experts.
Since the terror attack on tourists in Kashmir's Pahalgam area on 22 April, the Nifty Defence index has increased 2.99%, significantly outperforming the
Nifty 50
, which has gained 1.2% over the same period.
Following India's attacks on Wednesday, codenamed '
Operation Sindoor
', the Nifty 50 and
Sensex
held strong despite early jitters
, ending the day's trading session in the green.
Among domestic defence-related companies,
Hindustan Aeronautics
Ltd has gained 3.88% over the past fortnight,
Bharat Dynamics
Ltd has gained 1.85%, and
Mazagon Dock Shipbuilders
Ltd, 2.33%.
Vikas Gupta, chief executive officer and chief investment strategist at OmniScience Capital, said the prospect of retaliatory action by Indian armed forces following the Pahalgam terror attack had intensified focus on the defence sector, with the defence ministry prioritising faster execution of projects.
While the order books of defence companies are large, spanning five-seven years, execution lagged, he said. 'Now, there is pressure to execute orders quicker, possibly within three years instead of five. This could accelerate revenue and earnings… If that happens, analysts could upgrade their projections for defence companies," said Gupta.
A key growth trigger for India's defense sector was US President Donald Trump calling on Nato members to spend 5% of their GDP on defence. While India is not a member of the North Atlantic Treaty Organization, 'less-developed countries are turning to affordable Indian weapons systems, boosting the prospects for India's export", Gupta added.
Also read |
Operation Sindoor: Tensions spark worry over kharif sowing in border states
Export opportunities for Indian defence manufacturers are significant as the global defence stockpile is at a 10-year low, said Vinit Bolinjkar, head of research at Ventura Securities, adding that only a few countries were shipping defence products.
'Russia is restricted in its export capabilities because any country buying from it risks sanctions from the US. Similarly, Israel, which is constantly engaged in conflict, has depleted its stockpile and cannot afford to export," Bolinjkar said.
France is known more for its specialized, high-end defense equipment such as submarines and fighter jets, and not for conventional or cost-effective arms.
In this scenario, India is well-positioned to fill the gap, especially in the segment of affordable, conventional defence equipment, Bolinjkar said.
Within India's defence sector, sub-sectors such as aerospace and shipbuilding show significant potential, said experts.
Anirudh Garg, partner and fund manager at Invasset PMS, said the collaboration between Tata Advanced Systems Ltd and Airbus SE for the first military aircraft to be built in India highlighted the long-term growth prospects of the domestic defence sector.
'The private defence sector is another area gaining momentum, with companies such as Adani Defence & Aerospace making headway in UAVs (unmanned aerial vehicles), missiles, and ammunition," Garg said.
Also read |
Govt may invoke ESMA to curb hoarding, ensure steady supplies post Operation Sindoormark
Gupta of OmniScience Capital recommended that instead of betting on pure-play arms and ammunition companies, investors should look at companies that have an indirect exposure to the defence sector, such as those involved in critical minerals, cybersecurity, and drones.
NMDC
Ltd,
Coal India
Ltd, and Gujarat Mineral Development Corporation Ltd operate in the critical minerals segment.
'During a war, the priority often shifts from acquiring new platforms or systems to maximizing the operational capacity of the existing ones. For example, instead of placing new orders for an aircraft, the focus would be on ensuring that the existing aircraft are already in service are fully operational," Gupta said.
This leads to increased demand for maintenance, repairs, and upgrades, rather than new purchases.
Also, if the India-Pakistan conflict escalates into a full-blown war, companies involved in producing consumables, such as
Solar Industries India
Ltd and Bharat Dynamics Ltd, are likely to see more opportunities as demand for consumables increase, Gupta said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
31 minutes ago
- Mint
15,600% rally in five years! Small-cap EV stock jumps in a rally post-RBI MPC meeting outcome
Stock Market Today: Having seen 15,600% rally in five years, the small-cap EV stock gained in the intraday trades on Friday in a rally post-RBI MPC meeting outcome was announced. Check details While the sharp gain in the Indian Stock Markets following a sunrise 50 bps or basis point. also supported the gain for the small-cap EV stock MERCURY EV-TECH LIMITED. A surprising 50 basis point rate Cut decision boosts the Indian stock market, sending the benchmark Indices as S&P BSE Sensex up 800 points and the Nifty-50 index above the 25,000 mark. Besides the strong market sentiments led by RBI's interest rate decisions, the gains for Mercury EV-tech Ltd also were driven by the announcement following Business update. Small-cap EV stock Mercury EV-Tech business on Thursday 5, June, 2025 intimated the BSE or the Bombay stock Exchange about a business update. As per the business u[date announced by Mercury Ev-Tech Limited, the company has inaugurated a new showroom located at Shop No. 5, Near Sagar Complex, Jashonath Circle, Bhavnagar, Gujarat. Its other business its faculties include a chassis Manufacturing. unit. This is a state-of-the-art facilities with advanced machinery for diverse chassis types. MANUFACTURING FACILITY & CAPACITY: It has a 3.2 GW Lithium-Ion Battery Manufacturing Facility (Vadodara), The company has placed additional order for a fully robotic, high-throughput production line from a top-tier equipment provider. Equipment is expected by end of May, pilot production by mid-June 2025. It has Designed as a next-generation battery architecture hub with infrastructure for a wide range of chemistries. Multi-chemistry flexibility to cater to electric mobility and stationary energy storage. Capable of producing LFP, NMC, Sodium-Ion Cells, and Super Capacitor Modules Small-cap EV stock Mercury EV-Tech Share price touched intraday highs of ₹ 59.94 , which translated in to gains of more 1% The Small-cap EV stock Mercury EV-tech share price despite sharp corrections in the recent past, the Mercury EV-tech is still up 1560 % in the last 5 years. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Time of India
32 minutes ago
- Time of India
No official version of Bharat Mata portrait, so cannot be allowed in govt events: Kerala government
The Left government in Kerala on Friday made it clear that it was not in agreement with the use of the Bharat Mata portrait at the Environment Day event at the Raj Bhavan here as the picture was not authorised as the official version by the Constitution or the Indian government. Kerala Agriculture Minister P Prasad , who boycotted the event at the Raj Bhavan a day ago over the use of the portrait, said that those in constitutional offices cannot convert government programmes into political events . A similar view was also expressed by state General Education Minister V Sivankutty who said that the Raj Bhavan and the Governor were above politics and said that Arlekar should withdraw from the stand taken by him. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like El patrimonio de Palito Ortega conmociona al mundo. Boite A Scoop Undo The government's stand came a day after Governor Rajendra Vishwanath Arlekar asserted that there would be no compromise on Bharat Mata. Prasad, while talking to a TV channel, said that no Bharat Mata portrait has ever been acknowledged as the official or authorised version by the Constitution or any of the governments in power since independence. Live Events He further said that the portrait about to be used at the event was not carrying the Indian flag, but that of a political organisation, and therefore, it could not be honoured during a government event. The minister said that the particular political organisation and the Governor were free to pay homage to the portrait at private events, but it cannot be done in state government programmes. "We all have a political view, but those in constitutional positions have restrictions on how they express it," he added. He said that the government view was that such a stand ought not to have been taken by a constitutional establishment and expressed hope that it will be corrected by the concerned persons. "It actually should not be repeated in our country. We cannot accept it in Kerala," he added. The minister also questioned why the Governor was "rigid" on the issue, when none of the earlier Governors in the state and not even the Presidents of the country have carried out such a practice in the past. For the World Environment Day event, the Raj Bhavan came out with a minute-to-minute programme, but it initially did not have anything about paying floral tributes to the portrait of Bharat Mata, he said. On eve of the programme, a new schedule was sent to us and it included the paying of floral tribute to Bharat Mata portrait. "So, I enquired with the Raj Bhavan about the floral tributes and asked them to send me a picture of the portrait. The portrait was the one used by the RSS and was not recognised or authorised as an official version, I informed the Raj Bhavan that we cannot offer floral tributes to it," he said. The minister said that the Raj Bhavan in response said they cannot remove the portrait. On being told that the opposition was criticising the lack of response on the issue by Chief Minister Pinarayi Vijayan, Prasad said that the Congress-led UDF was trying to gain political mileage out of it especially in view of the upcoming bypoll in Nilambur assembly constituency. After knowing Raj Bhavan's stand, the state government relocated the event to the Secretariat's Durbar Hall and the Raj Bhavan went ahead with its programme. Later, in a statement issued by the Raj Bhavan, the Governor said, "Whatever be the pressure, from whichever quarters, there will be no compromise whatsoever on Bharat Mata." In his speech at the Raj Bhavan programme, the Governor said two ministers--state Education Minister and Agriculture Minister--had agreed to attend the function but they did not turn up for the event. While Sangh outfit Bharatiya Vichara Kendram strongly backed the Governor, the ruling CPI(M) and the Congress criticised the Raj Bhavan on the matter.
Time of India
32 minutes ago
- Time of India
Techie tries to buy a Gurgaon flat but finds even his Rs 1.2 lakh in-hand salary with no responsibilities not good enough
In today's India, earning Rs 20 lakh per annum is often seen as the benchmark of financial comfort. But a recent viral post on X has struck a chord with thousands, exposing the grim reality of urban homeownership , even for high earners. Shared by a user named Akhilesh, the post details how a friend living in Gurgaon , despite a hefty Rs 20 LPA CTC and frugal lifestyle, still finds himself priced out of the real estate market. In the tweet, Akhilesh writes about his friend's predicament: no car, no children, modest lifestyle, yet every real estate project he visits starts at a steep Rs 2.5 crore. 'If he buys this, he has to live paycheck to paycheck. No buffer. No vacations. No emergencies,' the tweet reads. Despite being in the top 5% of Indian earners, the post suggests, owning a decent home in a metro city remains out of reach, highlighting a growing mismatch between income and urban housing prices. — akhileshutup (@akhileshutup) Netizens react The post quickly caught fire online, igniting a flurry of responses that reflect the simmering frustration among India's salaried middle class. One user echoed the sentiment, writing, 'It's wild how even a high salary feels inadequate in certain cities. Many people are in the same boat, juggling expenses while trying to save. It makes you question what success means nowadays.' Another pointed out the long-term burden of luxury add-ons like 'infinity pools, zen gardens, biometric lifts', which not only inflate the purchase cost but also hike up monthly maintenance charges in the future. The discussion also took a broader economic turn, with one user arguing, 'He earns more than 95% of Indians. That means 7 crore people earn more than him, and a significant portion live in metro cities like Delhi. That's lakhs of families competing for premium housing. Demand is simply outpacing supply.' While some suggested that renting is a smarter option in the current climate, others questioned the societal obsession with homeownership. One user summed it up: 'Rent pe raho. Don't buy a home right now. Save up. Invest. You buy a home when you can afford it, not according to your whims and fancies."
