Op Sindoor impact? Defence shares at new file, 50% spike since February low

India’s listed defence firms have reached a file market capitalisation of Rs 11.23 lakh crore, pushed by renewed investor urge for food, geopolitical considerations, and sustained coverage give attention to home defence manufacturing. The rally, captured within the continued power of the Nifty India Defence Index, marks a pointy turnaround for the sector after a chronic correction.

The index has climbed 9 per cent up to now in Might, extending good points of 11.5 per cent in April and 24.6% in March. This surge follows a 33 per cent droop between July 2024 and February 2025. Since bottoming out in February, the benchmark has staged a cumulative restoration of over 50 per cent. The present valuation is considerably increased than the earlier peak of Rs 10.09 lakh crore seen in July final yr and up practically 62 per cent from the February low of Rs 6.95 lakh crore,
Moneycontrol reported.

Regardless of the broad good points, solely six of the 18 shares throughout the index have surpassed their earlier file highs. The remaining stay beneath earlier peaks, pointing to a rally concentrated in choose names.

Shares of corporations akin to DCX Programs, MTAR Applied sciences, Dynamatic Applied sciences, Cyient DLM, Unimech Aerospace and Manufacturing, Knowledge Patterns, Mishra Dhatu Nigam, Astra Microwave Merchandise, Hindustan Aeronautics, and BEML have surged between 55 per cent and 112 per cent from their 52-week lows hit in March and April.

Eight different defence shares that touched their lows earlier in 2024 have additionally rebounded, delivering returns starting from 58 per cent to 200 per cent. These embrace Cochin Shipyard, Bharat Dynamics, Mazagon Dock Shipbuilders, Zen Applied sciences, Bharat Electronics, Photo voltaic Industries India, Paras Defence and Area Applied sciences, and Backyard Attain Shipbuilders.

The rally gained momentum after tensions flared between India and Pakistan in early spring, adopted by a wave of investor optimism because the market corrected and rebounded.

Prime Minister Narendra Modi’s renewed give attention to boosting indigenous defence manufacturing below the Make in India initiative has additionally strengthened sentiment. His name for advancing fashionable navy capabilities and selling native manufacturing has strengthened expectations that authorities help for the sector will proceed.

Curiosity from greater than a dozen nations in buying India’s BrahMos missile system following its deployment throughout Operation Sindoor has added to investor confidence within the export potential of Indian defence applied sciences.

Institutional shopping for has picked up as properly. Mutual funds elevated their publicity to 11 of the 18 listed defence corporations in April. Hindustan Aeronautics noticed inflows of Rs 505 crore, elevating mutual fund holdings to Rs 13,480 crore. Photo voltaic Industries India attracted Rs 119 crore, taking the whole to Rs 15,510 crore. Mazagon Dock Shipbuilders acquired Rs 78 crore in contemporary investments, bringing its mutual fund holdings to Rs 1,727 crore.

Different firms that drew institutional curiosity embrace Zen Applied sciences, BEML, Knowledge Patterns, Backyard Attain Shipbuilders, Mishra Dhatu Nigam, and Dynamatic Applied sciences, with inflows starting from Rs 2 crore to Rs 60 crore. However, Bharat Electronics recorded the most important outflow, with mutual fund holdings dropping by Rs 893 crore to Rs 33,619 crore. Smaller reductions had been additionally seen in Cochin Shipyard, Astra Microwave Merchandise, Unimech Aerospace, and MTAR Applied sciences.

Sandeep Bagla of Belief Mutual Fund mentioned rising regional tensions are more likely to drive continued will increase in defence budgets, making the sector a lovely long-term funding alternative.

Anil Rego, chief govt at Proper Horizons PMS, known as defence each a structural and tactical play. He cited the federal government’s constant push for modernization, a rising export pipeline, and ongoing reforms below the Atmanirbhar Bharat program as key elements supporting the sector’s long-term potential.