Astra Microwave, Cochin Shipyard, Extend Gains, Nifty India Defence Up 20 Per Cent YTD; What Should Investors Do

Nifty Defence Stocks: Shares of Astra Microwave Products, Cochin Shipyard, and Zen Technologies closed higher by as much as 8.98 per cent on the NSE on May 15, 2025. Shares of domestic defence sector companies have made stellar gains so far in 2025. The Nifty India Defence Index which measures the performance of those stocks, which broadly represent the defence theme, has gained over 20 per cent so far in 2025.

Nifty Defence In Bull Territory

As of May 15, 2025, the index has surged over 133 per cent from its 52-week low and crossed another threshold by surpassing its recent high of 7,045, which it hit on December 17, 2024. Notably, an index is said to be in the bull territory when it recovers over 20 per cent from its most recent low and has surged past its previous high. At present, the index is trading close to its 52-week high level and is trading 5.50 per cent lower than 8,302.05.

Nifty Defence Top-Gainers

Astra Microwave Products, Cochin Shipyard, and Zen Technologies emerged as the top gainers among constituents of the Nifty India Defence Index, as they closed higher by up to 8.98 per cent today. Other constituents of the index, such as Garden Reach Shipbuilders & Engineers, Data Patterns (India), Paras Defence and Space Technologies, and Mazagon Dock Shipbuilders also closed higher by as much as 3.25 per cent. Index heavyweights, such as Hindustan Aeronautics (HAL), Bharat Electronics (BEL) and Solar Industries India also ended higher by up to 2.03 per cent.

The rally in defence stocks in recent sessions has followed multiple tailwinds for the domestic defence sector, such as robust demand for the defence sector stocks. Notably, the demand has risen in the aftermath of the four-day long conflict between India and Pakistan. Prime Minister Narendra Modi’s push for ‘Made in India’ defence infrastructure and equipment has also boosted investor sentiment.

Earlier on May 13, 2025, PM Modi addressed the general public after the success of Operation Sindoor. He applauded the effectiveness of indigenously developed defence equipment, and said, “The world is now witnessing the arrival of Made in India defence systems as a formidable force in 21st-century warfare”.

What Should Investors Do

With the rally seen in the Nifty Defence Index, shares of domestic defence stocks are garnering significant investor interest.

Ravi Singh, senior vice president of Retail Research at Religare Broking said that amid the surge in defence stocks, short-term traders can leverage the momentum seen in the sector, but should be wary of profit-booking at higher levels.

“Due to the ongoing concerns on the border (India and Pakistan border), the Nifty Defence Index has witnessed a surge, driven by increased investor interest in domestic defence stocks. This momentum is supported by strong order inflows, government policy support, and rising defence exports. This momentum can be leveraged for short-term traders, but caution is advised due to the potential for profit booking at higher levels,” Singh said.

Singh added that certain stocks are likely to continue to witness strong buying interest on the back of strong fundamentals. However, he urged investors to avoid over-leveraged positions.

He added: “Stocks with strong fundamentals and recent order wins may continue to attract buying interest. Investors are advised to adopt a buy-on-dips strategy in the current market scenario and avoid over-leveraged positions is key in such volatile phases.”

On the other hand he advised long-term investors to focus on the structural growth of the defence sector.

“Long-term investors should focus on the sector’s structural growth. The government’s push for indigenisation, higher capital outlay in defence budgets, and rising global defence demand create a favourable outlook for the sector,” Singh said.

Anil R, senior research analyst, Geojit Investments told Outlook Money that acceleration in modernisation is anticipated amid increased spending to acquire latest technology and R&D spending.

“We anticipate further acceleration in modernisation, increased spending to acquire latest technology, R&D spending and most importantly renewed focus on faster delivery of defence equipment given current geo-political tensions,” Anil added.