Defence Stocks Jump up to 7% as India Launches Precision Strikes on Pakistan; Investors Bet on Military Boost
Following India’s targeted strikes on terror hubs across Pakistan and PoK, defence stocks rallied sharply on Friday, 9 May, as investors anticipated increased government spending and rapid production ramp-up. The move comes amid heightened tensions along the border, with both nations engaging in cross-border attacks and retaliatory operations.
With defence now a key narrative in both security and investment circles, the next week’s government-industry engagement in Delhi may determine the pace of India’s war-readiness build-up and market momentum.
India’s precision missile strikes on nine terror targets in Pakistan and Pakistan-occupied Kashmir on Friday, 9 May, following the deadly Pahalgam attack, triggered a sharp rally in defence stocks on the Bombay Stock Exchange. Investors reacted to the escalating Indo-Pak conflict and reports of a high-level defence production meeting in New Delhi, fuelling expectations of increased capital expenditure and government orders.
Indian defence stocks surged in Friday’s trading session, outperforming the broader market, which remained subdued due to geopolitical uncertainties. The rally was driven by escalating tensions between India and Pakistan after the Indian Armed Forces launched precision missile strikes on identified terror bases in Pakistan and PoK. The military action came in response to a deadly terror attack in Pahalgam that killed 26 civilians earlier this week.
Among the top gainers were Hindustan Aeronautics Ltd (HAL), Bharat Dynamics Ltd (BDL), Bharat Electronics Ltd (BEL), and Paras Defence, all of which rose between 2 and 7 per cent. Strong interest was also seen in Cochin Shipyard, Mazagon Dock Shipbuilders, Data Patterns, and BEML.
Market buzz intensified after Bharat Forge Chairman and MD Baba Kalyani confirmed to CNBC-TV18 that defence manufacturers had been summoned to Delhi next week. “We’ve been called to Delhi next week. Our team is going. I can’t say more,” said Kalyani, hinting at an urgent review of production capacity and readiness.
As part of India’s evolving military modernisation push, HAL’s Tejas and Sukhoi Su-30MKI upgrade programmes, BDL’s Akash and Astra missile systems, and BEL’s radar and electronic warfare systems are expected to benefit from fresh orders. The FY26 defence budget already stands at ₹6.81 lakh crore, including ₹1.8 lakh crore for capital expenditure. Analysts now anticipate an upward revision or acceleration in deployment.
Brokerage Nuvama has projected a US$130 billion defence opportunity over the next five years, with the bulk of capital investment targeted at the Air Force and Navy.
International reactions have been cautious. U.S. Vice President JD Vance stated that Washington would not intervene in “a war that’s fundamentally none of our business,” though he called on both nations to de-escalate the conflict.
Meanwhile, on-ground tensions remain volatile. Pakistan responded to India’s Operation Sindoor with drone and missile attacks across at least 15 Indian cities, all of which were reportedly intercepted by India’s Integrated Counter-UAS Grid and air defence systems. The Indian military also targeted Pakistan’s air defence HQ-9 systems in Lahore in retaliation.
Civilians in Punjab and Rajasthan faced air raid sirens and blackout protocols amid fears of further escalation. The broader Bombay Stock Exchange remained jittery, but defence stocks defied the trend as sentiment tilted towards national security.
Kotak Securities noted in a post on X (formerly Twitter), “After the 2016 surgical strikes and the 2019 Balakot airstrikes, defence stocks gained rapidly, while the broader index experienced temporary volatility before stabilising.”
IdeaForge Technology Ltd, a domestic UAV manufacturer, is also expected to remain in focus due to its growing relevance in surveillance and border security missions.
With defence now a key narrative in both security and investment circles, the next week’s government-industry engagement in Delhi may determine the pace of India’s war-readiness build-up and market momentum.
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Samannay Biswas author
Working as Copy Editor at the Business Desk of Times Now Digital. Dedicated...View More
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