Defence stocks surge 50% in a month. 'Operation Sindoor' type tactical buy or overkill?

The palmy motorboat of ‘Operation Sindoor’ successful the aboriginal hours of Wednesday has erstwhile again turned the spotlight connected Indian defence stocks, which person rallied astir 50% implicit the past month, reflecting beardown capitalist interest. However, experts caution against chasing the rally retired of FOMO, stressing the value of a selective, strategy-driven attack to banal picking successful this space.

“Long-term investors should support a watchlist of stocks oregon sectors they are looking at, to allocate superior to. There is nary request to hurry oregon get into a panic mode oregon FOMO mode,” Vikas Gupta, CEO & Chief Investment Strategist astatine OmniScience Capital, said.

Gupta acknowledged the absorption “naturally” getting backmost connected the defence stocks pursuing India’s avenging of the Pahalgam attack. He said that the defence companies person ample bid books, which volition get adjacent larger on with the urgency to execute orders. The determination is apt to boost revenues and net and could commencement reflecting wrong the 1-3 years timeline.

Also read: Defence stocks spot $5 cardinal rally arsenic borderline tensions escalate

Echoing a akin sentiment, marketplace adept Nischal Maheshwari has asked investors to beryllium cautious arsenic the stocks whitethorn present look costly pursuing the caller rally. Maheshwari said that the caller commercialized successful defence stocks has been connected relationship of the geopolitical situation.

"Having said that, past particularly successful March, determination were a batch of orders which person gone retired to each these companies and that is besides getting reflected. These stocks had underperformed for immoderate clip initially, and benignant of a catch-up game, but astatine these prices, erstwhile again, the valuations are going to present commencement looking beauteous costly for astir of them. So, you request to beryllium cautious. Yes, it is simply a bully trade, but for semipermanent buying this is not the point," helium said.

Defence stocks person rallied up to 50% implicit the past 1 period with Paras Defence and Space Technologies topping the chart. Stocks similar Data Patterns, DCX Systems, Astra Microwave Products, Solar Industries India and Mazagon Dock Shipbuilders person delivered betwixt 35% and 21% returns successful this period.

Apart from Mazagon, different PSU stocks similar Mishra Dhatu Nigam, Garden Reach Shipbuilders & Engineers, Bharat Dynamics, Bharat Electronics, BEML and Hindustan Aeronautics Limited (HAL) person besides fixed double-digit returns successful the aforesaid period.

At the scale level, the Nifty Defence Index has jumped 16% and is among the best-performing sectors.

An ETMarkets investigation besides showed heightened capitalist involvement successful defence stocks existing passim this year, with communal funds expanding their holdings successful 11 retired of 18 stocks wrong the Nifty India Defence Index successful the March ended quarter, signalling increasing organization assurance successful the sector's semipermanent prospects.

Also read: Nifty musculus representation check: India-Pakistan conflicts person meant 5% dip. Will this clip beryllium different?

The apical communal money bargain successful the 4th that ended connected March 31, 2025 was BEML wherever MFs raised their holdings by 1.6% implicit the December quarter. The adjacent successful enactment were Solar Industries India, MTAR Technologies and Zen Technologies which saw a hike of 1.2%, 0.96% and 0.65%, respectively.

Meanwhile, Astra Microwave, Mishra Dhatu Nigam, BDL, Mazagon Dock, Paras Defence, Dynamatic Technologies and GRSE were among stocks which witnessed a emergence successful holdings of the overseas organization investors (FIIs).

(Disclaimer: Recommendations, suggestions, views and opinions fixed by the experts are their own. These bash not correspond the views of Economic Times)