Mazagon Dock, BEL and Bharat Dynamics soar to record highs as defence stocks extend gains to 7th session

Defence stocks, including Cochin Shipyard, Mazagon Dock Shipbuilders, Garden Reach Shipbuilders, and BEL, continued their unwavering rally in Monday’s trade (May 19), even as the Indian stock market remained in a tight consolidation range.

Today’s rally marked the seventh consecutive gain for defence stocks, with the Nifty Defence index rising another 3% to hit a day’s high of 8,555, resulting in a cumulative gain of 24%. 

Investor enthusiasm for these stocks stays upbeat amid expectations that the Indian government may increase defence spending amid heightened tensions with Pakistan. In addition, the March quarter results of defence companies released so far have met analysts’ expectations, supporting the ongoing rally on Dalal Street.

In today’s trade, Data Patterns (India) surged another 8% to ₹243.90 apiece. Shares of other defence-related companies such as Paras Defence and Space Technologies, Zen Technologies, IdeaForge Technology, MTAR Technologies, Bharat Electronics, Apollo Micro Systems, Bharat Dynamics, Astra Microwave Products, and HAL also rose by up to 5%.

The renewed investor interest in defence stocks after months of sidelines comes after India conducted strikes on terror camps in Pakistan and Pakistan-occupied Kashmir (PoK) on May 7. Dubbed ‘Operation Sindoor,’ the mission demonstrated the strength of India’s indigenously developed defence systems, which not only destroyed key air bases across the border but also successfully intercepted drones and missiles launched by Pakistan.

Investor sentiment strengthened further after Prime Minister Narendra Modi reiterated the government's focus on promoting indigenous defence production through the Make in India initiative. Optimism also grew following reports that over a dozen countries have shown interest in purchasing the BrahMos missile system after ‘Operation Sindoor’.

The heightening tensions have also led to expectations that the Indian government may allocate additional funds to the defence sector beyond what was announced in the Union Budget 2025–26. 

Additionally, India’s locally manufactured defence products are attracting growing global interest, with defence exports surging to a record high of ₹23,622 crore in the financial year 2024–25. The government is now aiming for annual exports worth ₹50,000 crore by 2029, thus strengthening its global footprint.

The Indian government has taken several policy initiatives in recent years and introduced reforms aimed at encouraging indigenous design, development, and manufacturing of defence equipment, thereby promoting self-reliance in the sector.

Shipbuilding stocks in focus

Shipbuilding stocks emerge as preferred bets among investors in the recent sustained rally, with Cochin Shipyard's share price gaining another 8% in early trade today, reaching an 8-month high of ₹2,195 apiece. The steady rally has resulted in a 29% gain for the stock so far in May.

Mazagon Dock Shipbuilders' share price also extended its winning run for the fifth consecutive trading session today, rising another 6% to record a fresh all-time high of ₹3,737, gaining 16% so far this month.

Likewise, Garden Reach Shipbuilders' share price has maintained its winning streak for the eighth straight session, reaching a 9-month high of ₹2,621 and delivering 30% returns to shareholders in May so far.

Other PSU defence stocks, including Bharat Electronics and Bharat Dynamics, also touched fresh record highs in today's session.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.