BEL, HAL, GRSE, Data Patterns, Paras Defence, More: Why Defence Stocks Jumped 77% In 30-Days? BUY/SELL

Majority of defence stocks have witnessed a strong rally over the past two trading sessions, so much so that they recorded at least 24% gains. Nifty Defence index has registered nearly 6.5% gains in 30 days. Mega defence players like Hindustan Aeronautics (HAL), Bharat Electronics (BEL), Data Patterns, MTAR Technologies, Zen Technologies and Paras Defence skyrocketed by at least 77% in 30-days. The performance turned bullish after Jefferies reported that defence and power equipment are most impressive for India's capital expenditure cycle.

Nifty Defence Index

The Nifty Defence index zoomed by 6.4% in its 30-days performance to currently stand at 9,523.05. On year-on-year, the performance is up by 7.4%.

Defence Stocks Strong Rally

On June 18th, stocks like Astra Microwave, Avantel, Bharat Electronics, Data Patterns, Kaynes Technology, Paras Defence and Solar Industries soared by 1% to 6%. These were top performers today. However, investors booked profits in some stocks such as HAL, Mazagon Dock Shipyard, Premiere Explosives, and Swan Defence which tumbled by 1% to 3.5%.

But in the past 30 days, defence stocks have majorly skyrocketed. The top performer is Paras Defence which skyrocketed by 76.7% in past 30 days on Nifty Defence index, followed by Astra Microwave with over 53% upside, Apollo Micro Systems with nearly 38% gains, Data Patterns with over 27% climb and Zen Tech which surged by over 24%.

Other stocks like MTAR Technologies advanced by 16.5%, GRSE rose by 9%, MIDHANI zoomed by 8.3% and Bharat Forge jumped nearly 7%.

However, giants like BEL, HAL and BDL advanced with marginal to 2% upside. On month-on-month basis, HAL has outperformed the two.

Symbol	Company Name	30-Day Change (%)	365-Day Change (%)
NIFTY INDIA DEFENCE	Nifty India Defence Index	6.35	7.51
MTARTECH	MTAR Technologies Ltd	16.46	389.16
PARAS	Paras Defence & Space Technologies Ltd	76.59	60.87
BEL	Bharat Electronics Ltd	0.35	6.89
DATAPATTNS	Data Patterns (India) Ltd	27.42	59.30
APOLLO	Apollo Micro Systems Ltd	37.70	117.37
ASTRAMICRO	Astra Microwave Products Ltd	53.19	47.66
GRSE	Garden Reach Shipbuilders & Engineers Ltd	9.08	-12.78
ZENTEC	Zen Technologies Ltd	24.15	-0.24
HAL	Hindustan Aeronautics Ltd	2.16	-11.49
COCHINSHIP	Cochin Shipyard Ltd	-2.88	-31.43
MAZDOCK	Mazagon Dock Shipbuilders Ltd	3.51	-22.33
SOLARINDS	Solar Industries India Ltd	-1.38	3.93
BHARATFORG	Bharat Forge Ltd	6.67	55.43
BDL	Bharat Dynamics Ltd	0.07	-31.27
AEQUS	Aequs Ltd	3.92	-
MIDHANI	Mishra Dhatu Nigam Ltd (MIDHANI)	8.32	1.89
BEML	BEML Ltd	0.26	-20.61
AXISCADES	AXISCADES Technologies Ltd	-3.19	44.93
DYNAMATECH	Dynamatic Technologies Ltd	1.76	48.37

On year-on-year basis, MTAR Technologies and Apollo Micro outperforms all of their peers with breathtaking surge of 389% and 117% respectively. This makes the two stocks multibaggers under defence basket on YoY.

Why Are Defence Stocks Rising?

As per Jefferies report, defence and power equipment firms have continued to offer the strongest visibility within the broader industrial universe. This is due to their healthy order books and favourable investment conditions.

Also, companies that are linked to power infrastructure and defence manufacturing are also well-placed to benefit from the next phase of the country's CAPEX cycle.

"Despite conflict and energy disruption, economic damage has been limited. Strong investment in defence, supply chains, and AI is supporting growth. Demand for capital remains high, reducing global savings and keeping interest rates elevated," said Mathieu Racheter, CFA, CAIA, Julius Baer.

Furthermore, defence segment has a host of opportunity awaiting.

As per JM Financial report, who hosted Dr Samir V Kamat, former Chairman of DRDO at an investor, highlighted that the government (GoI) is committed to increasing indigenisation at platform levels, and even at subsystem/component levels along with a significant thrust on defence R&D. Furthermore, to promote private sector participation, the GoI has created a level playing field with DPSUs (except for strategic platforms), and we have seen meaningful progress in capabilities in areas such as radar, EW, artillery guns, missiles, ammunition, etc.

"We are also seeing significant private sector progress in capabilities in areas such as high power microwaves and unmanned vehicles (air or sea). However, prolonged testing periods remain a challenge, particularly in the Army and the Air Force," analysts at JM said in a note.

Which Defence Stocks To Buy/SELL/ADD/REDUCE?

Analysts at Choice Equity Broking have recommended BUY on HAL, BDL, BEL, Zen Tech, Mazagon Dock and GRSE. While they have recommended ADD on stocks like Data Patterns, Apollo MICRO, Centum, and Cochin Shipyard. But these analysts have recommended REDUCE on AZAD Engineering and Astra Micro, while SELL call is assigned on DCX.

Company	Target Price (₹)	Rating Call
Hindustan Aeronautics (HAL)	5,050	BUY
Bharat Dynamics (BDL)	1,500	BUY
Astra Microwave Products	1,300	REDUCE
Bharat Electronics (BEL)	500	BUY
Data Patterns	4,060	ADD
Apollo Micro Systems	365	ADD
Centum Electronics	3,300	ADD
Zen Technologies	1,850	BUY
DCX Systems	150	SELL
Azad Engineering	1,900	REDUCE
Mazagon Dock Shipbuilders	3,100	BUY
Cochin Shipyard	1,550	ADD
Garden Reach Shipbuilders & Engineers (GRSE)	3,500	BUY

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