The heightened global uncertainty appears to have renewed investor interest in India’s defence and aerospace segment, with several key stocks touching fresh day highs.
Among the gainers, Data Patterns (India) shares surged the most, rising 3% to hit a high of Rs 3,049.50. It was followed by Bharat Dynamics Ltd (BDL) shares, which climbed 2.8% to touch Rs 1,940.70.
BEML shares also witnessed strong momentum, gaining 2.2% to reach Rs 4,473.00. Meanwhile, Hindustan Aeronautics Ltd (HAL) shares rose 1.6% intraday, hitting Rs 5,130.50.
The rise in these stocks may be attributed to the war tensions in the Middle East between Iran and Israel, as investors see potential in the sector along with an expectation of enhanced defence spending by the Indian government.
Commenting on the recent spike in defence counters, Sankhanath Bandyopadhyay, Economist at Infomerics Valuation and Ratings, also said, “Defence stocks look promising due to the ongoing geopolitical tussle between Iran and Israel. Moreover, the Indian government is likely to enhance defence spending from the current 2% of GDP to 3–4% over the next decade.”He added that with the government targeting Rs 25,000 crore in defence exports by 2025–26, the outlook for export-driven defence stocks remains strong.Also read: Nifty Internet index outperforms peers with 19% returns since Feb launch. Is the dotcom boom here to stay?
“In the current scenario, geopolitical tensions will likely be lingering between different countries, especially as being reflected in rising tensions in the Middle East. Investors should carefully assess the financials and outlook of such stocks before investing, and there should be a judicious mix so that a healthy dividend can also be earned,” he advised.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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