BEL, BDL, Cochin, Paras Defence, Mazagon Dock; Defence Stocks Rally Despite Trump's NATO Remarks Over Hormuz

Defence stocks in India rallied sharply on March 18 despite US President Donald Trump's latest remarks on NATO countries. The USA and Israel's war with Iran has entered the third week, and Trump has expressed his disappointment of NATO for their lack of actions in securing the Strait of Hormuz, a chokepoint in the Middle East that is responsible for about 20% of the global oil and gas supply.

Hundreds of vessels carrying essentials, crude, and other products are left stranded at the Hormuz due to Iran's threat. Amidst the Middle East conflict, defence stocks are in focus, and the majority of experts are optimistic on Indian aerospace and defence companies especially.

Defence Stocks Performance On March 18:

The Nifty India Defence index surged by over 1% to close at 8,092.40 on NSE. The index also touched an intraday high of 8,138.35.

Cyient DLM emerged as the top gainer with nearly 9% upside in the closing bell. While leading shipping companies like Mazagon Dock Shipbuilders and Cochin Shipyard rose by 4% each. BEML followed with over 3.44% upside, while DYNAMATECH rose by 3%.

Stocks like Bharat Forge was up by 2.8%, followed by Zen Tech, Garden Reach Shipbuilders (GRSE), Paras Defence which gained by 1.7% each. MIDHANI was up by 1.5%.

Notably, the defence PSU giants like Bharat Dynamics (BDL) soared by 1.5% and Bharat Electronics (BEL) which surged by nearly 1% as well. The two stocks have outperformed their rival Hindustan Aeronautics (HAL) who pared its early gains to end marginally lower by 0.2%. BEL is the largest defence company of India in terms of market share followed by HAL and BDL under the PSU ambit.

Among the gainers was also Data Patterns who gained by 0.5%.

On the other hand, five defence stocks could not join the bull rally. Solar Industries is the top loser of the day with over 2.5% downside followed by Astra Micro and MTAR Tech which dropped by over 2% and 1% respectively. UNIMECH was down by 1% as well.

Donald Trump On NATO:

US President Donald Trump is not happy with NATO. While addressing the reporters at Oval Office, Trump revealed that a number of NATO member countries rebuffed his appeal for a multinational naval force to reopen the key passage Strait of Hormuz.

He called NATO countries response as 'very foolish mistake'.

Through his Truth Social account, Trump said, "The United States has been informed by most of our NATO "Allies" that they don't want to get involved with our Military Operation against the Terrorist Regime of Iran, in the Middle East, this, despite the fact that almost every Country strongly agreed with what we are doing, and that Iran cannot, in any way, shape, or form, be allowed to have a Nuclear Weapon."

"I am not surprised by their action, however, because I always considered NATO, where we spend Hundreds of Billions of Dollars per year protecting these same Countries, to be a one way street - We will protect them, but they will do nothing for us, in particular, in a time of need," Trump added.

On the Islamic regime's leaderships, Trump added, "Fortunately, we have decimated Iran's Military - Their Navy is gone, their Air Force is gone, their Anti-Aircraft and Radar is gone and perhaps, most importantly, their Leaders, at virtually every level, are gone, never to threaten us, our Middle Eastern Allies, or the World, again!.

Lastly, he said, "Because of the fact that we have had such Military Success, we no longer "need," or desire, the NATO Countries' assistance - WE NEVER DID! Likewise, Japan, Australia, or South Korea. In fact, speaking as President of the United States of America, by far the Most Powerful Country Anywhere in the World, WE DO NOT NEED THE HELP OF ANYONE! Thank you for your attention to this matter."

During the summit 2025, NATO allies made a commitment to investing 5% of Gross Domestic Product (GDP) annually on core defence requirements and defence- and security-related spending by 2035. They will allocate at least 3.5% of GDP annually based on the agreed definition of NATO defence expenditure by 2035 to resource core defence requirements and to meet the NATO Capability Targets.

How Indian Defence Stocks Benefit From Middle East War?

As per Choice Equity Broking, India's defence industry is currently undergoing a structural transition from a component supplier to a system-level exporter.

Accordingly, the analysts here said, "Unlike sectors such as autos or chemicals, where logistics disruptions can significantly impact supply chains, the defence sector is less exposed to immediate trade disruptions, as government-to-government contracts, strategic logistics corridors and military supply chains typically remain operational even during conflicts. As a result, defence manufacturers are generally able to continue supplying equipment to partner or allied nations despite geopolitical tensions."

Escalating tensions around the Strait of Hormuz could trigger higher defence procurement across Gulf nations. The Choice report added, the Middle East
accounts for ~30-35% of global arms imports, making it one of the largest defence markets globally. India's defence exports have steadily grown to Rs 23,600 crore ($2.8 billion) in FY25, with the govt targeting Rs 50,000 crore by FY29E, indicating strong export momentum.

Disclaimer:The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred as "we"). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.