Zen Technologies, Paras Defence, Shipping Corp: Defence stocks rally; Nifty Defence index up over 2%

Defence stocks were trading higher on Friday, June 13, even as the headline equity indices took a sharp knock amid weak global cues.

At the time of writing this article, the Nifty India Defence index was trading 2.38% higher at 8,866.40 levels.

Among other stocks, Bharat Dynamics (2.27%), Data Patterns (2.41%), Astra Microwave Products (2.32%), Bharat Electronics (2.27%), Hindustan Aeronautics (2.16%), Mtar Technologies (1.6%) and Mazagon Dock Shipbuilders (0.72%) were also trading higher on Friday.

In a year’s time, the Nifty India Defence sector has jumped over 25%, while year-to-date, it has jumped almost 32%.

1. Defence stocks came into the limelight post-rising tensions between India and Pakistan after an attack in Pahalgam. Global conflicts (Russia-Ukraine, Israel-Hamas) also made defence stocks attractive to the investors. The government’s focus on building domestic capabilities further bolstered this sector.

2. Defence Minister Rajnath Singh on Tuesday said during the 11 years of Prime Minister Narendra Modi's "bold and visionary" leadership, India's defence sector has transformed remarkably from a largely import-driven model to becoming a "trusted global exporter".

News reports said that India has seen its defence exports growing by almost 34x in the past 10-11 years. It is gradually becoming a self-reliant producer with strong indigenous capabilities.

Sharing some data on defence exports, Singh underlined the government's thrust on 'Aatmanirbhar Bharat' and 'Make in India' initiatives.

India's defence exports have risen to ₹23,622 crore in 2024-25 from ₹1,940 crore in 2014-15, the union minister had said.

3. Last month, various news reports suggested that the Defence Acquisition Council, chaired by Defence Minister Rajnath Singh, approved the sixth round of emergency procurements (EP-6), allowing purchases worth up to ₹40,000 crore. These include surveillance drones, kamikaze drones, long-range loitering munitions and artillery ammunition.

4. This year, between January and June 2025, more than 45 major defence orders were announced by various defence firms, making the sector attractive to the investors.

5. India and Pakistan’s tensions after the Pahalgam attack also led to a rally in the defence stocks. Operation Sindoor added to the optimism for the sector.

6. Following the ongoing Iran-Israel attacks, defence exports are likely to rise amid hopes of higher defence equipment orders. Israel attacked Iran's capital early Friday in strikes that targeted the country's nuclear programme.

Shares of shipping firms such as Great Eastern Shipping Company and Shipping Corporation of India also surged despite weak sentiments post-Israel’s attack.

The benchmark for the price of moving the major raw materials by sea has risen nearly 50% in the last month, and 34% of that surge has only come in the month of June.

Reports also suggested that analysts expect shares of GE Shipping to rise on the back of tensions in the Middle East.