As India-Pakistan tensions rise, defence stocks are gaining attention. Several Indian defence companies are preparing for a key meeting in Delhi next week. The Modi government reportedly called the meeting, which is expected to involve major companies like Bharat Forge, Hindustan Aeronautics Ltd (HAL), and Bharat Dynamics Ltd (BDL). Baba Kalyani, Chairman of Bharat Forge, confirmed his company’s participation but shared few details.

Key Players in India’s Defence Sector

Kalyani Group produces a wide range of defence products. These include artillery systems, armoured vehicles, ammunition, missiles, and air defence solutions. Other significant players in India’s defence industry include:

• HAL: Known for producing LCA Tejas and Sukhoi Su-30MKI aircraft.
• BDL: Makers of guided missiles and the Akash missile.
• BEL: Specializes in communication systems, radars, and naval systems.

Rising Tensions and Defence Stocks

Tensions between India and Pakistan have pushed defence stocks into the spotlight. India’s Operation Sindoor led to a failed attack by Pakistan on Indian military targets. India neutralized Pakistan’s HQ-9 air defence system in Lahore, leading to shifts in the defence stock market.

• Elbit Systems, which manufactures kamikaze drones, saw its stock price rise.
• Avic Chengdu Aircraft Co. Ltd, maker of Pakistan’s J-17 fighter jet, also saw stock increases.

Defence Stocks and Investor Sentiment

Experts from Kotak Securities point out that defence stocks often reflect investor sentiment during times of geopolitical tension. Past events like the 2016 surgical strikes and 2019 Balakot airstrikes led to rapid growth in defence stock prices.

Additionally, HAL and GRSE have secured major orders for aircraft, submarines, and naval vessels. This indicates real business activity, not just market speculation.

India’s Defence Budget Focus on Modernization

India’s defence budget for FY26 is ₹6.81 lakh crore. Of this, ₹1.8 lakh crore is allocated for capital expenditure. The government’s focus on modernization and indigenous production through initiatives like Make-in-India is clear. This strategic direction is expected to shape the future of the defence sector.