Defence stocks like Paras Defence, Cochin Shipyard, HAL, and BEL have surged up to 71% since April. With valuations soaring, is it time to cash in or stay invested? Experts share key insights.
Post-Pahalgam Surge: Defence Stocks Take Flight
Ever since the Pahalgam terror attack on April 22 defence stocks have been on fire. The leading lot was incurred with Paras defence which rallied 71%, data patterns shot 46%, GRSE up 42%, and MIDHANI rose by 41%. Defdin was thermometer so far, even with the BSE Sensex adding just 4% over the last few weeks.
Operation Sindoor Ignites Market Optimism
More buzz on Indian defence capability — this time magnified further by Operation Sindoor and the accuracy as well as size of the operation has boosted investor sentiment. Rallying sentiment of national fervor and expectations about indigenously developed defence manufacturing by India.
Analysts Split: Opportunity or Overheated?
But not everyone is yelping without a head. Be wary that momentum-driven trades tend to be the riskiest of the lot, experts say. Kotak Institutional Equities had cautioned of “irrational exuberance” with the market apparently adopting half-baked narratives too fast, this time in defence sector. They compared it to previous themes that have previously driven a corner—in recent years.
Book Some Gains, Say Market Veterans
Geojit Investments’ Vijayakumar advised caution and said that although long-term outlook is great, their valuations look excessive currently. Profit booking would be justified: “he told investors not to lose sight of the fundamentals in the fun of it.
Momentum or Mirage? Navigating the Surge
Astra Microwave, Cochin Shipyard,BDL & DCX Systems gained between 27-36%, Mazagon Dock, Zen Technologies, BEL, HAL&BEML were trading in green with a touch of 16-27%. Religare Broking’s Ajit Mishra said traders can still look for short-term opportunities in the thematic plays like defence, but they should remain focused & strategical in their approach and refrain from contrarian bets unbacked..
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Strong Order Pipeline Keeps Long-Term Hope Alive
Though the sector is not completely out of the woods, it has a bright future even with valuation worries. Amidbeing antique Stock Broking sold bullish on Indian defence shipyards — over three times & an unprecedented Rs 8.45 lakh crore worth of defence orders approved from FY22-FY25 vs the combined amount during previous three years.
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The Bottom Line: Don’t Let FOMO Fly Your Portfolio
The defence rally may feel unstoppable, but chasing highs without a plan could be risky. Whether you book profits now or stay for the long haul, make sure you’re flying with a parachute—not just hype.
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