HAL, Mazagon Dock: Defence stocks rally on India-Pak conflict, Rafale deal

The defence stocks rally comes amid reports of the Pakistan army violating the ceasefire along the Line of Control (LoC) and Indian troops responding appropriately with small arms

Defence stocks rally: Shares of Indian defence companies, including Hindustan Aeronautics, Bharat Dynamics, Garden Reach Shipbuilders, Data Patterns, Mazagon Dock Shipbuilders, and others, surged up to 8 per cent on Monday, April 28, amid concerns of escalation of conflict between India and Pakistan, following the deadly terrorist attack in Pahalgam, which claimed 26 lives. 

 

The rally comes amid reports of the Pakistan army violating the ceasefire along the Line of Control (LoC) and Indian troops responding appropriately with small arms for the fourth time over the past few days.  

In addition, Defence Minister Rajnath Singh is, reportedly, meeting Prime Minister Narendra Modi today to brief him on security arrangements after the Pahalgam terror attack. This comes after 25 tourists and a Kashmiri local were shot dead at Baisaran meadow in Pahalgam on April 22.  

 

In response to the attack, India announced several retaliatory measures against Pakistan including suspension of the Indus Water Treaty, closure of Attari-Wagah Check Post, restricting SAARC visas for Pakistani nationals, expulsion of military advisors and reduction of High Commission Staff Strength.  In addition to the India-Pakistan conflict, the Indian Navy is expected to sign a massive ₹63,000-crore deal for 26 Rafale-M fighter jets from France. The agreement includes 22 single-seater Rafale-M jets and four twin-seater trainers, with deliveries expected to be completed by 2031, according to reports. The deal is likely to be signed by the Defence Secretary and representatives of the French company Dassault Aviation. 

 

Among individual stocks, shares of Hindustan Aeronautics jumped over 5.5 per cent to hit an intraday high of ₹4,429.5 against the previous session's close of ₹4,196.4. In comparison, the benchmark NSE Nifty50 index was trading at 24,275.35, up 236.00 points or 0.98 per cent. 

 

Other major defence stocks, including Bharat Dynamics jumped over 6 per cent, Mazagon Dock Shipbuilders rose around 5 per cent, Cochin Shipyard gained 7 per cent and Garden Reach Shipbuilders gained 9 per cent in the intraday, on Monday.

 

Shares of defence and space sector company Paras Defence and Space, meanwhile, jumped over 11 per cent to hit an intraday high of ₹1,165.95 on Monday. The company is scheduled to consider a stock split at its board meeting on Wednesday, along with the approval of FY25 results and final dividend, which also boosted investor sentiment.