Defence Stocks Surge Up To 11% On India-Pak Tensions, Rafale Deal Lifts Market Sentiment

Mumbai: Indian defence stocks witnessed a significant rally on Monday, April 28, following heightened geopolitical tensions between India and Pakistan. The surge came in response to a terrorist attack in Pahalgam on April 22 that claimed 26 lives, including 25 tourists and a local. With repeated ceasefire violations by Pakistan along the Line of Control (LoC), Indian forces responded with small arms fire. In a high-level meeting, Defence Minister Rajnath Singh briefed Prime Minister Narendra Modi on the nation’s security preparedness.

India announced several retaliatory measures, including suspension of the Indus Water Treaty, closure of the Attari-Wagah Check Post, visa restrictions for Pakistani nationals, expulsion of military advisors, and reduction of diplomatic staff — all contributing to investor concerns about regional stability and boosting defence sector stocks.

Defence Stocks Lead the Market Rally

Leading defence companies posted strong intraday gains, significantly outperforming the broader market. Hindustan Aeronautics Limited (HAL) rose over 5.5 per cent to an intraday high of Rs 4,429.5, compared to its previous close of Rs 4,196.4. Bharat Dynamics gained more than 6 per cent, while Mazagon Dock Shipbuilders and Cochin Shipyard rose around 5 per cent and 7 per cent, respectively. Garden Reach Shipbuilders registered the highest surge among major players, jumping 9 per cent.

Shares of Paras Defence and Space Technologies soared over 11 per cent to Rs 1,165.95 amid expectations of a board meeting to consider a stock split, FY25 results, and final dividend declaration, adding to investor enthusiasm.

Rafale-M Deal Strengthens Defence Outlook

Market optimism was also buoyed by reports that the Indian Navy is set to sign a Rs 63,000-crore agreement for 26 Rafale-M fighter jets with French manufacturer Dassault Aviation. The deal includes 22 single-seater and 4 twin-seater trainer jets, with deliveries expected by 2031. The signing, expected soon, marks a significant step in India’s defence modernization and maritime preparedness, particularly in the Indo-Pacific region.

This strategic acquisition and heightened security preparedness signal long-term strength in India’s defence sector, aligning with the government’s focus on national security and military modernisation.