The recent military operation named Operation Sindoor has set a significant milestone for India, marking its most extensive tri-service action since the 1971 Indo-Pak War. This strategic maneuver, carried out by the Indian armed forces, is a response to escalating tensions between India and Pakistan, particularly following a terror attack in Pahalgam that tragically took the lives of 26 civilians. As a result of this operation, defense stocks have experienced a remarkable surge.

Surge in Defense Stocks Amid Rising Tensions

The stock market has seen a notable uplift, especially in defense-related companies such as Paras Defence and Space Technologies Ltd., Garden Reach Shipbuilders & Engineers Ltd., and Mishra Dhatu Nigam Ltd. Since the tensions emerged in 2025, these companies have led the pack in a rally that has captured investors’ attention.

• Paras Defence: Shares surged nearly 40% in recent weeks.
• Garden Reach Shipbuilders: Experienced over a 28% increase.
• Mishra Dhatu Nigam and Bharat Dynamics: Both saw their stocks rise by more than 26%.

Prime Minister Narendra Modi expressed his admiration for the armed forces after visiting AFS Adampur, where he met with air warriors and soldiers. He highlighted the valor and commitment of these individuals, stating that "India is eternally grateful to our armed forces for everything they do for our nation."

Market Resilience Post-Operation Sindoor

Despite some fluctuations in the market, the Nifty India Defence Index has demonstrated resilience. Since April 22, it has recorded a 9.39% increase, contrasting sharply with the modest 1.98% rise of the benchmark NSE Nifty 50. Other companies have also contributed to this upward trend:

• Data Patterns India and DCX Systems: Each saw returns exceeding 20%.
• Cochin Shipyard and Mazagon Dock: Added gains of 17.38% and 14.32%, respectively.

Market Capitalization Growth

The defense sector’s market capitalization has expanded significantly, increasing by Rs 86,211 crore during this period. Major contributors include:

• Bharat Electronics: Over Rs 23,683 crore.
• Hindustan Aeronautics: Added Rs 21,654 crore.
• Bharat Dynamics: Contributed Rs 12,345 crore.

As of Tuesday afternoon, the Nifty Defence Index was trading at a 4.12% premium, leading the sectoral rally while many other sectors were advancing as well. However, it is essential to note that Cyient DLM was an exception, experiencing a decline of 3.69% since late April.

Looking Ahead

As geopolitical tensions continue to influence the market, the defense sector remains a focal point for investors. Understanding the implications of military actions like Operation Sindoor can provide insights into market trends and investment opportunities. As we watch these developments unfold, the resilience and growth within the defense sector will undoubtedly play a crucial role in shaping the economic landscape in the coming months.

For more insights on market trends and defense stocks, check out our analysis on the impact of military operations on stock performance here.