The Indian defence sector saw a strong rally on Monday, driven by escalating tensions between India and Pakistan following a terror attack in Jammu and Kashmir’s Pahalgam. The rising geopolitical risks sparked increased investor interest, particularly in defence stocks, which are often seen as a safe bet during times of geopolitical unrest.
The Nifty Defence index surged by an impressive 4.5 percent, marking its strongest intraday gain since April 15, 2025. This sharp increase reflected widespread buying activity across the sector, with seventeen out of eighteen stocks in the Nifty Defence index trading in the green. The rally was particularly notable in major defence stocks such as Paras Defence, Garden Reach Shipbuilders & Engineers, and Data Patterns (India), all of which posted significant gains.
Key Stock Performances: Paras Defence, Garden Reach Shipbuilders, and BEL Lead the Charge
Among the top gainers was Paras Defence and Space Technologies, whose stock surged by an impressive 11.66 percent, hitting an intraday high of Rs 1,167. This remarkable uptick came after the company made an important announcement regarding its upcoming board meeting on April 30. During this meeting, the board will discuss crucial matters such as a potential stock split, approval of audited financial results for FY25, and a proposal for dividend distribution.
The positive sentiment surrounding Paras Defence reflected broader optimism within the defence sector, as the stock benefitted from both the geopolitical situation and the company’s strong fundamentals. This surge in share price demonstrated investors’ confidence in Paras Defence’s growth prospects, particularly in the current environment of rising defence spending.
Another major player that benefited from the rally was Garden Reach Shipbuilders & Engineers, which saw its shares climb by 9.17 percent. The company’s growth prospects, supported by its involvement in naval and shipbuilding projects, have made it a key beneficiary of heightened defence spending.
Similarly, Data Patterns (India), a leading player in the defence electronics sector, gained 8.17 percent. The company’s expertise in providing advanced electronic systems for defence applications has contributed to its strong performance amid growing tensions in the region.
Additionally, Bharat Electronics Ltd (BEL), one of India’s largest public sector defence manufacturers, saw its stock rise by 3.28 percent, reaching an intraday high of Rs 307.35. BEL’s consistent performance and strong order book have made it one of the most prominent names in the defence sector. On Monday, the company emerged as the second-biggest gainer on the Nifty50, following Reliance Industries, which is the index’s heavyweight.
Geopolitical Tensions Fuel Defence Sector Growth
The surge in defence stocks can be attributed to the increasing uncertainty surrounding the India-Pakistan border situation. The recent terror attack in Pahalgam, Jammu and Kashmir, has heightened concerns over the security situation in the region. These tensions typically lead to increased defence spending, as the government may prioritize national security measures and military preparedness.
For investors, this environment is seen as an opportunity to invest in the defence sector, which is expected to benefit from any increase in defence budgets or military operations. As such, defence stocks are often considered a safe-haven investment during times of geopolitical unrest, making them attractive to risk-averse investors.
