Market Cap Of Defence Stocks Rises Rs 1 Lakh Crore Since Pahalgam Attack
The India-Pakistan feud after the Pahalgam attacks on April 22 has seen defence stocks shift gears and add over Rs 1 lakh crore in market cap. Nifty India Defence, the index which maps Indian defence stocks, has since rallied over 12%.
The spike started gaining momentum after India undertook 'Operation Sindoor'—a precision strike exercise in which Indian armed forces hit nine terrorist locations in Pakistan and Pakistan-occupied Kashmir.
The operation marked India's most significant tri-service action since the 1971 war. The military action was in direct response to the Pahalgam terror attack that claimed the lives of 26 civilians. At a press briefing following the operation, Indian military officers stated that at least 100 terrorists were eliminated during the precision strikes under Operation Sindoor.
"Earlier this morning, I went to AFS Adampur and met our brave air warriors and soldiers. It was a very special experience to be with those who epitomise courage, determination and fearlessness. India is eternally grateful to our armed forces for everything they do for our nation," Prime Minister Narendra Modi posted on X, alongside photos of his visit.
Earlier this morning, I went to AFS Adampur and met our brave air warriors and soldiers. It was a very special experience to be with those who epitomise courage, determination and fearlessness. India is eternally grateful to our armed forces for everything they do for our nation. pic.twitter.com/RYwfBfTrV2
May 13, 2025"In the next 20 years, some Indian defence stocks could reach a level comparable to their US peers," Porinju Veliyath, founder and chief executive officer of Equity Intelligence India, told NDTV Profit
However, he also pointed out that many of these companies have gone up too much and beyond a justifiable limit.
The rally in defence stocks had last peaked around September or October 2024, followed by significant corrections in overheated stocks, he said.
How The Sector Fared
Despite market fluctuations amid geopolitical tensions, the Nifty India Defence index emerged resilient, posting a 12.85% rise since April 22. This compares to a mere 1.87% increase in the benchmark NSE Nifty 50.
Paras Defence led the rally, with share price rising nearly 42% in the aforementioned span of time. Shares of Mishra Dhatu Nigam followed suit, gaining over 34%, while Garden Reach Shipbuilders was up 27% and Bharat Dynamics rose nearly 24%.
Data Patterns India and and DCX Systems posted returns of over 21% each, and Astra Microwave Products and Cochin Shipyard followed adding 19.61% and 18.81% each.
Cyient DLM remains the only counter that bucked the trend, losing 3.46% since April 22.
Defence Stocks: M-Cap Addition
The defence sector added Rs 1,17,163 crore in market capitalisation over the period, with Hindustan Aeronautics contributing over Rs 32,235 crore. Bharat Electronics and Bharat Dynamics each added Rs 29,970 crore and Rs 13,057 crore, respectively.
Mazagon Dock Shipbuilders and Solar Industries further contributed to the bulk of market cap gain, adding Rs 13,021 crore and Rs 8,054 crore respectively.
As of 11:45 a.m. on Thursday, the Nifty Defence Index was trading at a 2.36% premium, leading the sectoral rally as most sectors advanced.
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