Barring Unimech Aerospace, all the other defence stocks part of the Nifty India Defence index were trading higher on the National Stock Exchange on April 28 amid ongoing tensions between India and Pakistan along the Line of Control.
Shares of Mazagon Dock Shipbuilders, Hindustan Aeronautics, Bharat Dynamics, Cochin Shipyard, Garden Reach Shipbuilders and Paras Defence were up 6-11%. Nifty India Defence index has gained over 8% in the year so far, and today its up over 4%.
The rally in the defence stocks comes amid reports of ceasefire violation along the LoC by the Pakistan army. According to media reports, Indian troops have also responded appropriately.
Additionally, Minister of Defence Rajnath Singh is also expected to meet Prime Minister Narendra Modi today to brief him on security arrangements after the Pahalgam terror attack.
Hindustan Aeronautics shares snapped their two day losing streak to trade as high as 6% on the NSE today. Last week, the Indian Army allowed limited operations of the grounded HAL-made advanced light helicopter-Dhruv in Srinagar and adjoining areas amid heightened tensions and security concerns over the killings of tourists in the Pahalgam terrorist attack.
It is not even that long ago when HAL got targeted by critics because of the accident. The Dhruv choppers were grounded for over two months after a crash involving Indian Coast Guard officers in Porbandar. The stock slid to its year-low in March and month-low on April 7. However, due to today’s rally the stock has recovered and is near its month-high.
A formal announcement of the conclusion of Rs 63,000-crore deal with France for 26 Rafale-M fighter jets, which is due today, has also pushed the defence stocks under radar of market participants. Media reports indicate that deliveries of the jets will begin in around three-and-a-half years once the contract is signed and will be completed in around six-and-a-half years.
