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India’s defence sector stocks witnessed strong buying interest on Friday, May 9, after the Indian Armed Forces carried out strategic missile strikes under Operation Sindoor targeting nine terror hubs in Pakistan and Pakistan-occupied Kashmir (PoK).

This escalation, following the deadly Pahalgam terror attack, has reinforced investor confidence in companies catering to India’s military infrastructure and aerospace capability.

Shares of Hindustan Aeronautics Ltd (HAL), Bharat Dynamics Ltd (BDL), Bharat Electronics Ltd (BEL), and Paras Defence & Space Technologies rose sharply during morning trade, gaining between 2 and 7 per cent.

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Bharat Dynamics led the charge with a 6.13 per cent rise, touching Rs 1,485 on the NSE.

Paras Defence climbed 4.47 per cent to Rs 1,385.8 per share.

BEL gained 3.08 per cent to Rs 313.1 per unit.

HAL also moved up 2.21 per cent, while Mazagon Dock Shipbuilders added 1 per cent.

The rally came even as benchmark indices slipped in early trade due to heightened geopolitical risks. The Sensex dropped 910 points to 79,423, and the Nifty fell 311 points to 24,962, underlining the defensive nature of the sector amid market uncertainty.

Market participants are betting on increased defence orders following India’s precision missile strikes. The operations targeted terrorist infrastructure in key areas like Muzaffarabad, Bahawalpur, and Rawalakot. This move, widely seen as a strong response to Pakistan's terror proxies, is expected to lead to a sustained uptick in defence procurement.

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On Thursday night, India reportedly intercepted and neutralised a Pakistani attempt to strike back at Indian military positions near the border, which further amplified focus on surveillance, missile systems, and electronic warfare equipment—segments dominated by listed PSUs like BEL and BDL.

With geopolitical risks rising, analysts say defence stocks could continue to outperform as India accelerates its indigenisation push under the 'Atmanirbhar Bharat' initiative. HAL and BDL, key suppliers for the Tejas fighter and missile systems respectively, are expected to see strong order books in the coming quarters.

Additionally, Bharat Electronics is likely to benefit from fresh tenders for radars, surveillance, and communication equipment required for border deployment.

Defence sector stocks have historically seen buying during times of geopolitical flare-ups. With Pakistan tensions likely to remain elevated and defence capex expected to rise, companies in this space may continue to attract investor attention.

Brokerages may soon revise their earnings outlook on defence PSUs in light of Operation Sindoor and upcoming announcements during the Budget Session.

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