Latest news with #NiftyDefenceIndex
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Business Standard
16-05-2025
- Business
- Business Standard
Sky high: Investors pile into defence stocks with all guns blazing
The Nifty India Defence Index jumped 5.6 per cent on Friday to cap a record 17.2 per cent weekly gain — its biggest since the gauge was launched in 2022. The index closed at a fresh peak of 8,309.2. This rally follows media reports suggesting an additional ₹50,000 crore could be earmarked for defence under a supplementary budget this financial year. 'The boost will take overall defence allocation past ₹7 trillion for 2025-26,' noted Siddhartha Khemka, head of research, wealth management, Motilal Oswal Financial Services. In the Union Budget presented in February, total defence outlay for FY26 was raised 7.7 per cent to ₹4.91 trillion from ₹4.57 trillion in the FY25 revised estimate. The figure includes both revenue expenditure – such as salaries & wages and operational costs – and capital allocation, which covers procurement of new equipment and other capital expenditure. Revenue expenditure has typically dominated defence outlays, accounting for 65 per cent in FY25 and averaging 62.4 per cent since FY21. Over the past five years, India's overall defence budget and defence capex have increased at a compound annual growth rate of 7.6 per cent. Companies in the defence sector tend to benefit more from higher capital allocations. For FY26, capital allocation is budgeted to increase 12.9 per cent to ₹1.8 trillion from ₹1.6 trillion in the FY25 revised estimate. However, actual capex in FY25 rose just 3.4 per cent over FY24; it was 7.3 per cent below the Budget estimate. In contrast, revenue expenditure is budgeted to rise 4.9 per cent to ₹3.12 trillion in FY26 from ₹2.97 trillion in the FY25 revised estimate. Actual revenue spending in FY25 was 2.3 per cent higher than in FY24 and 5.1 per cent above the Budget estimate. Shares of Paras Defence and Space Technologies, Cochin Shipyard, Mazagon Dock Shipbuilders, and Garden Reach Shipbuilders & Engineers climbed between 10 per cent and 20 per cent during the week, fuelling the latest rally. The Nifty Defence Index has now soared more than 50 per cent from last month's lows. Investor interest has been rekindled amid heightened hostilities between India and Pakistan. There is also optimism regarding India's push for defence self-reliance, expanded budgets, growing exports, and progress in indigenous design. 'The successful performance of made-in-India defence systems against Chinese and other platforms in Pakistan is likely to boost long-term demand for India-made equipment,' said Ashwini Shami, executive vice-president and senior portfolio manager, OmniScience Capital. 'This (the latest conflict) also showcased the modern style of remote warfare – without the involvement of too many personnel in direct engagement – and the sophistication of the Indian systems and their integration with disparate systems from various countries. This highlighted not only defence production but also India's integration capabilities to make them work together.'
Indian Express
08-05-2025
- Business
- Indian Express
Is Solar Industries entering a new growth phase with defence orders?
On January 15, India successfully tested its first indigenously developed micro-missile system, Bhargavastra, marking another major milestone under the Aatmanirbhar Bharat initiative. This test symbolises the power of three growth trends: local defence procurement, indigenous technology development, and rising defence exports. Together, these trends have turned Indian defence stocks into multibaggers over the past five years. Among these outperformers, Solar Industries India stands out. The company has effectively capitalised on all three growth drivers, consistently outperforming the Nifty Defence Index and multiple defence PSUs. After a 20% correction in the second half of 2024, the stock rebounded strongly, surging over 50% over the last two months. It recently hit an all-time high of Rs 13,664, a staggering 1,490% rally over five years, surpassing the Nifty Defence Index's rally of 1,211.64%. In Q3 FY25, the company reported its highest-ever quarterly revenue, EBITDA, and order book. Its Q4 earnings are also expected to be robust. Source: Solar Industries' Quarterly Earnings Reports Initially focused on industrial clients, Solar Industries entered the defence sector in 2010-11. For over a decade, the company invested steadily in building capabilities with minimal returns, as India's defence space was largely dominated by PSUs and foreign imports. Policy uncertainty and delayed approvals only added to the challenge, and until FY24, the defence segment contributed just 5-9% to revenues. The wait was finally over when the government ramped up efforts to promote indigenisation and opened up the defence sector to private players, driving Solar Industries' stock upwards. Solar Industries India share price momentum (May 2020 – May 2025) Today, Solar Industries stocks trade at a price-to-earnings (PE) ratio of 109x, above its 10-year PE median of 44.7x. Still, many brokerages have a Buy rating on the stock. ICICI Securities, in its April 22 report, gave a Buy rating with a price target of Rs 16,000, which is around 22% higher than its current price. What makes the company's management, brokerages, and investors bullish? Solar Industries' long-term investment in defence Solar Industries started its journey in the early 1980s as a trader. It started manufacturing commercial explosives used in mining, infrastructure, and construction in the mid-1990s. For a long time, its single largest client was Coal India Limited (CIL), accounting for over 90% of the company's revenue. Solar Industries gradually expanded its exports, and today it is India's largest manufacturer and exporter of explosives and initiating systems, with around 24% market share. Exports make up 40% of the company's revenue. However, the turning point for the explosive maker was the pick-up in defence products. Solar Industries entered the defence sector in 2010-11 at a time when there weren't many private players. Even today, the sector is ruled by defence PSUs. Moreover, there was a lack of clarity around policies, and approval took 5-10 years. All this resulted in a weak order book for a private sector player like Solar Industries. Until FY24, the defence segment accounted for 5-9% of the company's revenue.
Economic Times
07-05-2025
- Business
- Economic Times
Defence stocks surge 50% in a month. 'Operation Sindoor' type tactical buy or overkill?
Following the successful 'Operation Sindoor,' Indian defence stocks have surged, attracting significant investor attention. Experts advise caution against impulsive buying, emphasizing a strategic approach due to potentially inflated valuations after the recent rally. Mutual funds increased holdings in several defence stocks, indicating long-term confidence, while FIIs also raised their stakes in specific companies. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The successful launch of ' Operation Sindoor ' in the early hours of Wednesday has once again turned the spotlight on Indian defence stocks , which have rallied nearly 50% over the past month, reflecting strong investor interest. However, experts caution against chasing the rally out of FOMO, stressing the importance of a selective, strategy-driven approach to stock picking in this space.'Long-term investors should keep a watchlist of stocks or sectors they are looking at, to allocate capital to. There is no need to hurry or get into a panic mode or FOMO mode,' Vikas Gupta, CEO & Chief Investment Strategist at OmniScience Capital, acknowledged the focus 'naturally' getting back on the defence stocks following India's avenging of the Pahalgam attack. He said that the defence companies have large order books, which will get even larger along with the urgency to execute orders. The move is likely to boost revenues and earnings and could start reflecting within the 1-3 years a similar sentiment, market expert Nischal Maheshwari has asked investors to be cautious as the stocks may now look expensive following the recent rally. Maheshwari said that the recent trade in defence stocks has been on account of the geopolitical situation."Having said that, last especially in March, there were a lot of orders which have gone out to all these companies and that is also getting reflected. These stocks had underperformed for some time initially, and sort of a catch-up game, but at these prices, once again, the valuations are going to now start looking pretty expensive for most of them. So, you need to be cautious. Yes, it is a good trade, but for long-term buying this is not the point," he stocks have rallied up to 50% over the past one month with Paras Defence and Space Technologies topping the chart. Stocks like Data Patterns, DCX Systems Astra Microwave Products , Solar Industries India and Mazagon Dock Shipbuilders have delivered between 35% and 21% returns in this from Mazagon, other PSU stocks like Mishra Dhatu Nigam , Garden Reach Shipbuilders & Engineers, Bharat Dynamics BEML and Hindustan Aeronautics Limited (HAL) have also given double-digit returns in the same the index level, the Nifty Defence Index has jumped 16% and is among the best-performing ETMarkets analysis also showed heightened investor interest in defence stocks existing throughout this year, with mutual funds increasing their holdings in 11 out of 18 stocks within the Nifty India Defence Index in the March ended quarter, signalling growing institutional confidence in the sector's long-term top mutual fund buy in the quarter that ended on March 31, 2025 was BEML where MFs raised their holdings by 1.6% over the December quarter. The next in line were Solar Industries India, MTAR Technologies and Zen Technologies which saw a hike of 1.2%, 0.96% and 0.65%, Astra Microwave, Mishra Dhatu Nigam, BDL, Mazagon Dock, Paras Defence, Dynamatic Technologies and GRSE were among stocks which witnessed a rise in holdings of the foreign institutional investors (FIIs).(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
News18
28-04-2025
- Business
- News18
Defence Stocks Surge: Paras Defence, BEL, HAL Rally Up To 10% As India-Pakistan Tensions Escalate
Last Updated: Defence stocks surged up to 10% on Monday amid India-Pakistan tensions. Paras Defence, BEL, Data Patterns, HAL, and others saw significant gains. Defence Stocks: Shares of defence companies including Paras Defence and Space Technologies Ltd, Bharat Electronics Ltd (BEL), Data Patterns (India), Hindustan Aeronautics Ltd (HAL), Bharat Dynamics and many more jumped up to 10 per cent intraday on Monday amidst the heightened tensions between India and Pakistan. Investors scramble to bet on defense stocks following the souring of relationship between two countries after terrorists killed 26 tourists in Baisaran Valley of Pahalgam, Kashmir. Following the attacks, India has taken various strict measures including banning of Paksitan's Youtube channels, breaking of diplomatic ties, revoking Indus Water Treaty, and many more. The sharp rally followed reports that Defence Minister Rajnath Singh briefed Prime Minister Narendra Modi on the security situation in Jammu and Kashmir. The 40-minute briefing occurred as New Delhi considered retaliatory measures after the April 22 attack that killed 26 tourists. Nifty India Defence Index jumped 4.14 per cent around 1:40 pm to trade at 6,915.45. Earlier, it opened at 6,674.33. On Monday, the scrip of Paras Defence and Space Technologies Ltd climbed to Rs 1,157.90 a piece at the time of writing this report with a gain of 10.77 per cent. Similarly, Data Pattern (India) shares upped 7 per cent, BEL shares gained 2 per cent and HAL shares zoomed 5 per cent. Paras Defence and Space Technology Ltd will hold a board meeting on April 30, to consider and approve the standalone and consolidated audited financial results the company for the quarter and year ended March 31, 2025 and approval of sub-division/split of existing equity shares of the company and payment of dividend on equity shares of the company for the financial year ended March 31, 2025. Defence Stocks In Nifty Defence Index (LTP as of 1:35 pm) Location : New Delhi, India, India First Published: April 28, 2025, 14:03 IST News business » markets Defence Stocks Surge: Paras Defence, BEL, HAL Rally Up To 10% As India-Pakistan Tensions Escalate
