Defence stocks in action! HAL, Mazagon Dock, GRSE and others rise up to 15% today amid India-Pakistan conflict

Stock Market Today: Defence stocks such as Hindustan Aeronautics (HAL), Mazagon Dock, Garden Reach Shipbuilders (GRSE), and others added 4-15% to their gains today, April 29, amidst the ongoing India-Pakistan conflict. 

Analysts believe this rally is driven by the expectations of increased demand for military equipment and the potential for heightened defence spending in the region and globally.

Garden Reach Shipbuilders share price rises 15%

Garden Reach Shipbuilders or GRSE was the top gainer among the defence stocks. Garden Reach Shipbuilders share price rose to intraday highs of ₹2,020, which translated into gains of more than 15% over the previous day's closing levels. As of 2.20 pm, GRSE share price was up 11.81% at ₹1,956 apiece on the BSE.

Mazagon Dock Shipbuilders share price hits 52-week high

Mazagon Dock Shipbuilders shares were among other key gainers in the defence stocks pack today. Mazagon Dock Shipbuilders share price gained almost 9% to scale a 52-week or 1-year high of ₹3,035. Mazagon Dock Shipbuilders share price, which had its 52-week low of ₹1,035 in May last year, has given multibagger returns to its investors.

Hindustan Aeronautics or HAL share price gains more than 5%

Hindustan Aeronautics or HAL share price added to gains, rising to intraday highs of ₹4,660, translating into a 5% upside for the PSU defence stock. Hindustan Aeronautics share price has been rising regarding reports about India signing a deal to buy 26 more Rafale jets.

Bharat Dynamics, Bharat Electronics share prices gain 4% each

Bharat Dynamics share price gained more than 4% during the intraday trade today, while Bharat Electronics (BEL) share price closely followed as that also rose by a similar tandem.

Why are defence stocks rallying? Experts weigh in

Dr. Vikas Gupta, CEO & Chief Investment Strategist at OmniScience Capital, said, “In the backdrop of a potential India-Pak war, it is not surprising that the defence stocks are rallying. In the case of a war, even if limited to 2-4 weeks, the demand for defence equipment, including arms, ammunition and weapons, could be substantial and result in significant orders to Defence companies."

Gupta said that the military runs on many things beyond weapons, such as logistics, food, clothing and basic supplies, and all of these would need to be replenished and kept ready. “In light of the above, it is not surprising that defence stocks are rallying. The need for a much heightened focus on defence for India, and potentially, to significantly increase the defence budget for the long term, has been highlighted by the current situation,” said Gupta.

Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities, attributed the action in the defence sector stocks to a combination of two factors. The first being the INDO-PAK LOC tensions, which he said, could push the government to enhance domestic defence capabilities, leading to more orders or contracts for domestic firms. “Furthermore, there are expectations of an increase in global defence spending, which is boosting investor confidence in the sector,” added Tapse. It is believed that geopolitical tensions and increased defence spending in the US, Europe would create export opportunities for India.

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.