Defence Stocks Reach All-Time High as Investor Confidence Grows:

Suspense crime, Digital Desk : India’s defence sector has recorded a new growth milestone and The market value of 18 publicly listed defence companies reached ₹11.23 lakh crore. This is surge in the markets shows increased investor optimism alongside positive movements within the sector. This surge is in tandem with the sustained growth of the Nifty India Defence Index.

Performance In The Market and Indices

The entire market’s total capitalisation confirmed its growth from ₹10.09 lakh crore in July 2024 to ₹11.23 lakh crore, a 50% uptick since February 2025’s low of ₹6.95 lakh crore. The Nifty India Defence Index gained 9% in May along with 11.5% in April, and 24.6% in March. The Nifty India Defence had suffered a steep 33% correction between July 2024 and February 2025.

The index has seen over 50% recovery ever since its low in February. Even with the rally, only six stocks in the index have crossed their record highs.

Winning Stocks

The rise has been sharper in selective counters. Probably the most noticeable are the 10 companies that touched 52-week lows in March and April. Their increments have beensurged by 55% to 112%. Some of them are:

DCX Systems

MTAR Technologies

Dynamatic Technologies

Cyient DLM

Unimech Aerospace and Manufacturing

Data Patterns

Mishra Dhatu Nigam

Astra Microwave Products

Hindustan Aeronautics

BEML

Besides these, another eight stocks witnessed strong recovery from their previous lows, with increases ranging between 58 and 200 percent:

Cochin Shipyard

Bharat Dynamics

Mazagon Dock Shipbuilders

Zen Technologies

Bharat Electronics

Solar Industries India

Paras Defence and Space Technologies

Garden Reach Shipbuilders

What Led to the Rally

The rally set in after strategic geopolitical tensions of Indian Pak started heating up, followed by an overall market boom starting from March.

Additional tailwind was provided when PM Modi reiterated the emphasis on indigenous defence manufacturing under the Make in India campaign.

During his address, there was talk of amplifying warfare capabilities, along with the rationale of modern warfare systems of operation, tribal systems, and instilling policies of expectations, resulting in fuel support.

News over a dozen countries' interests after acquiring BrahMos missile system post operative Sindoor bolstered sentiments further.

Mutual Fund Activity in the Sector

The month of April saw an expansion of investments for mutual funds at 11 out of the 18 listed defense firms. The most pertinent investments include:

An increase in holdings by Hindustan Aeronautics by 505 crores, increasing current holdings to 13,480 crores.
Increase in Solar Industries India investments to 119 crores, raising holdings to 15,510 crores.
Increase in Mazagon Dock Shipbuilders investment to 78 crores, raising total investments to 1727 crores.

Other firms that received increased investments include Zen Technologies, BEML, Data Patterns, Garden Reach Shipbuilders, Mishra Dhatu Nigam, and Dynamatic Technologies with inflows ranging between 2 crores to 60 crores.

Bharat Electronics suffered the largest investment withdrawal, with mutual fund investments reduced by 893 crores. More modest capital reductions were noted on Cochin Shipyard, Astra Microwave Products, Unimech Aerospace, and MTAR Technologies.

Expert Insights

Trust Mutual Fund's Sandeep Bagla is of the opinion that the reason for increasing spending inactivity concerning the military enables investment opportunities to flourish in the relative domain. On the other hand, Anil Rego under Right Horizons PMS considers defence to be a product of both long-term and short-term foreshadowing, suggesting that there are immediate support bound to emerge due to relentless budgets escalations and subsequent government reforms and export potential through Atmanirbhar Bharat initiative.