The only correct answer to the age-old question, “War, what is it good for?” is defence stocks. As India and Pakistan skirmished in the aftermath of Operation Sindoor, the shares of state-run arms makers jumped. Tensions at the border pushed investors toward defence firms, adding billions in market value in just a few days.
What’s new: India’s defence stocks rose sharply after the May 7 military strike on terrorist camps in Pakistan.
Why it matters: Investors see defence firms as winners in India’s post-strike security and military spending push.
In numbers:
- Bharat Dynamics rose 21.5 per cent in 5 days
- Bharat Electronics gained 12.1 per cent
- HAL returned +7.8 per cent, Mazagon Dock +9.2 per cent
- Defence stocks added over $5 billion in market value
In-depth: After India conducted airstrikes on Pakistani terrorist camps on May 7, investors bet that national security concerns and the government’s push for defence self-reliance would boost orders for domestic manufacturers. Major state-run arms makers surged. Bharat Dynamics gained over 21 per cent. BEL and Mazagon Dock stocks rose sharply as well.
If you invested Rs 100 in each stock on May 8, your return five trading sessions later would range from Rs 107 to Rs 121, a far better yield than a year’s interest from a savings account.
The defence sector remained strong despite market volatility and rising geopolitical tensions. The Nifty India Defence index has risen 9.39 per cent since April 22, outpacing the Nifty 50’s 1.98 per cent increase. Bharat Electronics, Hindustan Aeronautics, and Bharat Dynamics added Rs 57,682 crore in market value as of May 13, 2025.
The Make in India push is now firmly aligned with military policy. As geopolitical risks rise, markets are rewarding arms makers. The defence sector has become one of the hottest pockets in India’s equity markets.
What they said: “The world is now witnessing the arrival of made-in-India defence systems as a formidable force in 21st-century warfare,” Prime Minister Narendra Modi said during his address to the nation two days after a ceasefire with Pakistan was declared.
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