One Year After Operation Sindoor, India's Defence Stocks Turn Multibaggers

One year after Operation Sindoor, India's defence sector has emerged as one of the strongest-performing themes in the stock market, driven by record government spending, rising geopolitical tensions and a sharper policy focus on military self-reliance.

The operation, launched between May 7 and May 10 last year in response to the Pahalgam terror attack that killed 26 civilians, marked a major shift in India's defence posture. India targeted strategic terror infrastructure in Pakistan and Pakistan-occupied Kashmir while showcasing indigenous weapons systems and advanced domestic military technologies.

Since then, the Nifty India Defence Index has surged 32%, sharply outperforming the Nifty 50, which delivered negative returns during the same period.

The combined market capitalisation of the index's 18 constituent companies has risen by ₹2.9 lakh crore to ₹11.92 lakh crore over the past year.

Procurement Push Drives Rally

A key trigger behind the rally has been a sharp acceleration in defence procurement and policy support.

The government has approved ₹9.3 lakh crore worth of defence acquisitions in FY26 so far, nearly four times the ₹2.5 lakh crore cleared during the same period last year.

The Defence Acquisition Council alone cleared proposals worth ₹2.38 lakh crore on March 27, including major purchases such as the S-400 air defence system and medium transport aircraft.

The broader "Atmanirbhar Bharat" push has further strengthened investor confidence in defence manufacturing and indigenous technology platforms.

India's defence budget for FY27 has been pegged at a record ₹7.85 lakh crore, up 15% from the previous year, with capital expenditure rising nearly 22% to ₹2.19 lakh crore.

Defence Stocks Deliver Multibagger Returns

Several defence-linked stocks have delivered strong gains over the past year.

MTAR Technologies emerged as the biggest gainer, surging 394% from ₹1,382.95 to ₹6,677.00. Data Patterns nearly doubled, gaining 95% during the period.

Other major gainers included Garden Reach Shipbuilders & Engineers, Bharat Forge and Bharat Electronics, which rose between 44% and 83%.

Stocks such as Mishra Dhatu Nigam, Astra Microwave Products, BEML and Cochin Shipyard also posted gains of 23–42%.

Meanwhile, Hindustan Aeronautics, Solar Industries India, Paras Defence and Space Technologies and Zen Technologies advanced between 8% and 30%.

However, not all stocks participated in the rally. Bharat Dynamics, Mazagon Dock Shipbuilders and DCX Systems delivered negative returns during the period.

Brokerages Remain Bullish

Brokerages remain structurally positive on the defence sector, especially companies with strong indigenous technology capabilities and intellectual property.

Nomura has highlighted defence electronics as a key opportunity, favouring Bharat Electronics, Data Patterns and Solar Industries, while viewing Hindustan Aeronautics as a relatively lower-risk play.

Motilal Oswal Financial Services expects the sector to benefit from rising domestic procurement and growing export opportunities, though it has cautioned about supply chain constraints in specialised components and imported subsystems.

With geopolitical tensions remaining elevated globally and India continuing to push defence indigenisation aggressively, investors increasingly view the sector as a long-term structural growth theme rather than a short-term tactical trade.