Indian defence stocks have reached record market capitalization of ₹11.23 lakh crore as the Nifty India Defence Index continues its strong performance.

The index gained 50 per cent since February 2025 after recovering from a 33 per cent correction, with a 9 per cent increase in May alone.

As of 2 pm today, the Nifty India Defence Index was trading at 8,225.05, down 1.01 per cent from the previous close. Market sentiment was impacted slightly by Moody’s downgrade of the US credit rating to Aa1.

Despite the overall dip in the defence index, several stocks showed positive momentum, with Zentec leading gains at 5 per cent followed by BEML at 2.41 per cent.

Investor attention is particularly focused on Bharat Electronics Limited (BEL), which is scheduled to release its Q4FY25 results today. BEL shares were trading at ₹364.60, up 0.19 per cent with substantial trading volume of over 4 crore shares valued at ₹1,484.12 crore.

The broader defence sector rally has been uneven, with only six stocks surpassing their previous highs. Companies like DCX Systems, MTAR Technologies, and Hindustan Aeronautics have seen remarkable rebounds between 55-112 per cent. Today’s trading showed mixed performance across defence companies, with PARAS experiencing the steepest decline of 6.01 per cent.

Mutual funds have increased their exposure to 11 defence firms, with Hindustan Aeronautics and Solar Industries India seeing the largest inflows, while BEL witnessed the biggest outflow.

Market experts attribute the sector’s growth to increasing geopolitical tensions, government support for indigenous defence manufacturing through Make in India and Atmanirbhar Bharat initiatives, and rising defence budgets. The sector is viewed as a promising long-term investment opportunity with growing export potential.

The overall market remains bullish with the Nifty just 5 per cent away from its all-time high of 26,277.35, having gained 5.5 per cent in calendar year 2025 so far.

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Published on May 19, 2025