HAL, BEL, BDL, Paras Defence, Zen, Cochin Shipyard, GRSE: Is it time to cash in on the defence stock rally?

Defence shares on Dalal Street continued their relentless march on May 19, the seventh straight day of gains as investor confidence remained strong. Leaders such as Mazagon Dock Shipbuilders, Bharat Electronics Limited (BEL), and Bharat Dynamics reached new all-time highs as hopes of higher defence spending by the government and improved quarterly numbers fueled them.

Defence index gains 24% in seven sessions

The Nifty Defence index jumped almost 3 per cent on Monday to a high of 8,555, marking an extension of its great run that has now yielded a total 24 per cent return since the early weeks of May. Such sudden momentum is a vote of confidence in the sector’s growth potential by investors, supported by India’s recent military action along the Pakistan border, popularly referred to as ‘Operation Sindoor.’ The operation highlighted India’s indigenous defence prowess and improved market mood.

Shipbuilding stocks lead 

Amongst sector giants, shipbuilding firms were among the best performers. Mazagon Dock Shipbuilders rose 6 per cent to an all-time high of Rs 3,737, extending its five-day winning run and rising 16 per cent for May so far. Cochin Shipyard gained 8 per cent, hitting an 8-month high of Rs 2,195, and Garden Reach Shipbuilders rose steadily, hitting a 9-month high of Rs 2,621 with a 30 per cent rise for May so far.

Rising defence exports fuel optimism

Investors still feel good about the sector as the government says it will spend more on defence than the Rs 5.25 lakh crore spent for 2025-26. Prime Minister Narendra Modi’s focus on independence and to make India makes people think there will be good news from this sector. Defence sales to other countries went up and hit an all-time high of Rs 23,622 crore in FY25, the sector hopes this will be Rs 50,000 crore by 2029 as international markets want what India makes on its own like the BrahMos missile system.

Broader defence segment also gains momentum

Other defence stocks like Bharat Dynamics, Data Patterns, Paras Defence, Zen Technologies, and HAL rose by 3 to 8 per cent, driven by good Q4 numbers and continued investor interest. This sector-wide interest reflects increasing confidence in India’s strategic defence build-up and its ability to draw global alliances and contracts.