Defence stocks rally up to 3% amid Iran-Israel tensions, investors eye sectoral boost, geopolitics fuel long-term export optimism
Leading the gains was Data Patterns (India) Ltd, which surged 3% to a day's high of Rs 3,049.50. Bharat Dynamics Ltd (BDL) followed closely with a 2.8% rise to Rs 1,940.70. BEML shares rose 2.2% to Rs 4,473.00, while Hindustan Aeronautics Ltd (HAL) climbed 1.6% to touch Rs 5,130.50, according to an ET report.
The surge comes amid rising tensions between Iran and Israel, pushing investors toward sectors considered resilient during geopolitical crises.
Market watchers believe the current situation may also accelerate government defence spending plans.
Sankhanath Bandyopadhyay, Economist at Infomerics Valuation and Ratings, noted, 'Defence stocks look promising due to the ongoing geopolitical tussle between Iran and Israel. Moreover, the Indian government is likely to enhance defence spending from the current 2% of GDP to 3–4% over the next decade.'
He added that the Centre's aim to achieve Rs 25,000 crore in defence exports by FY26 provides further support to stocks with export-oriented operations.
The heightened global uncertainty has strengthened the outlook for companies catering to military and aerospace demand, analysts said.
Cautioning investors, Bandyopadhyay said, 'In the current scenario, geopolitical tensions will likely be lingering between different countries, especially as being reflected in rising tensions in the Middle East. Investors should carefully assess the financials and outlook of such stocks before investing, and there should be a judicious mix so that a healthy dividend can also be earned.'
The rally also reflects growing confidence in India's indigenous defence manufacturing sector, which has been prioritized under the government's Atmanirbhar Bharat initiative.
Stay informed with the latest
business
news, updates on
bank holidays
and
public holidays
.
AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
5 minutes ago
- Economic Times
RBL Bank shares rally 3% as Dubai-based Emirates NBD Bank eyes up to 20% stake
Shares of RBL Bank rose 2.7% to Rs 266.95 on Wednesday after reports said Dubai government-owned Emirates NBD Bank is in talks to acquire up to a 20% stake in the private lender through a significant capital infusion. ADVERTISEMENT The stock, which has rallied more than 21% in the past month and over 64% in the past six, rose for an eighth time in nine sessions. It closed Tuesday at Rs 259.95, up 4.6%, with a market value of Rs 15,831.21 crore. The Emirates NBD Bank PJSC is in advanced discussions to acquire a minority stake in RBL Bank through a preferential allotment. This would mark a primary capital infusion into RBL and help the Dubai-government-owned lender deepen its Asia strategy. The deal, still under negotiation, could be similar in structure to the recent SMBC-Yes Bank investment. Emirates NBD may end up holding around 15–20% of RBL's expanded capital base, just below the open offer threshold, pending regulatory approval. That would translate to an investment of approximately Rs 3,166.24 crore. 'However, the deal is likely to take place at a premium to the current price,' people familiar with the matter told The Economic Times. RBL Bank is entirely publicly owned, with several domestic institutions holding modest stakes. Quant Mutual Fund owns 6.65%, Nippon Life India 3.11%, ICICI Prudential Life 1.06% and LIC 1.19%. Mahindra and Mahindra acquired a 3.48% stake in 2023, while Zerodha holds 1.24%. British International Investment exited its 3.82% holding in April. ADVERTISEMENT The Reserve Bank of India in May granted in-principle approval to Emirates NBD to convert its existing Indian branches in Chennai, Gurugram and Mumbai into a wholly owned subsidiary. The Dubai-based bank also recently launched investment banking operations in India.'There is a deep connect between UAE and India, both diplomatic and commercial. The bank has been eyeing opportunities but has not been very keen to buy into NBFCs (non-banking finance companies) unlike some of their peers,' an industry executive told The Economic Times. 'There is also a lot of synergy in wealth and other product distribution.' ADVERTISEMENT RBL Bank, originally set up 70 years ago in Maharashtra, transformed itself into a national player beginning in 2010, focusing on credit cards and microfinance. However, its differentiated asset strategy is considered cyclical and exposed to stress in unsecured the March quarter, RBL Bank's net profit fell 80% sequentially to Rs 68.7 crore, despite a rise in other income to Rs 1,000 crore. Net interest income dropped 2.3% year-on-year to Rs 1,563 crore. ADVERTISEMENT 'Business growth is gaining traction and slippages are expected to normalise by 2QFY26,' Nitin Aggarwal, analyst at Motilal Oswal told The Economic Times. 'Margins will be flattish to lower before it will claw back up. The trajectory is expected to improve starting FY26. The cards business is expected to grow in the mid-single digits.' Despite the stock's recent rally, analysts say it still trades below book value and remains among the most affordable banking stocks in India, with a P/E ratio of over 21. However, sources caution that talks may not result in a deal. The lender is also exploring a capital raise from institutional investors as a fallback. ADVERTISEMENT If successful, Emirates NBD's move will mark the second major investment from West Asia into an Indian bank this quarter. In April, Abu Dhabi Investment Authority and Warburg Pincus committed Rs 7,500 crore to IDFC First Bank. Also read | Emirates NBD eyes RBL Bank stake for India, Asia play (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
United News of India
11 minutes ago
- United News of India
EAM Jaishankar meets US Secy of Defence Pete Hegseth, discusses advancing bilateral defence partnership
Washington/New Delhi, July 2 (UNI) External Affairs Minister S Jaishankar met with US Secretary of Defence Pete Hegseth during which they discussed advancing the bilateral defence partnership and building on growing convergences and capabilities. In a post on X, the EAM said: 'Great to meet @SecDef Pete Hegseth in Washington DC today. 'Had a productive conversation on advancing the India-US defence partnership, building on growing convergences of interests, capabilities and responsibilities.' A US Department of Defense readout, said the two met at the Pentagon, 'to discuss the close cooperation between the two countries, weapons sales and the upcoming signing of the framework for the new defense partnership." Almost right at the beginning of the administration, President [Donald J.] Trump and Prime Minister Shri [Narendra] Modi set a strong foundation for our relationship, which we're building on here today: productive, pragmatic and realistic," Hegseth said. "And our nations boast a rich and growing history of cooperation driven by a shared commitment to a free and open Indo-Pacific." The secretary said both the U.S. and India are mutually aware of the security concerns in the region, and both nations have the ability to counter that threat together. He also touched on U.S. efforts to provide India with the tools needed to counter threats in the Indo-Pacific region. "The United States is very pleased with the successful integration of many U.S. defense items into India's inventory," Hegseth said. "And building on this progress, we hope we can complete several major pending U.S. defense sales to India, expand our shared defense industrial cooperation and coproduction efforts, strengthen interoperability ... between our forces, and then formally sign a new 10-year Framework for the U.S.-India Major Defense Partnership ... which we hope to do very soon." During a meeting in February between Trump and Modi, the two leaders announced plans to pursue new procurements and coproduction arrangements for Javelin antitank guided missiles and Stryker armored vehicles. Also discussed was procurement for six additional P-8I maritime patrol aircraft. India has already integrated into its own military weapons, such as the C‑130J Super Hercules, C‑17 Globemaster III and P‑8I Poseidon aircraft, as well as the CH‑47F Chinook, MH‑60R Sea Hawk and AH‑64E Apache. India also utilizes the Harpoon antiship missiles, M777 howitzers and MQ‑9B Sky Guardians. Also in February, President Trump and PM Modi pledged to increase military cooperation with enhanced training, exercises and operations. Hegseth and Jaishankar discussed participation in the next India-U.S. Defense Acceleration Ecosystem Summit, where the two nations will continue to build on U.S.-India defense industrial cooperation and produce new innovations in technology and manufacturing. "We're eager to work alongside you to realize our shared goals," Hegseth said. "They're deep and ongoing." Jaishankar said India's relationship with the U.S. is already strong, but more can be done. "We believe that our defense partnership is today truly one of the most consequential pillars of the relationship. It's not built merely on shared interests, but we believe really deepening convergence and of capabilities, of responsibilities," EAM Jaishankar was quoted as saying. "And what we do in the Indo-Pacific, we believe, is absolutely crucial to its strategic stability." UNI RN
Hans India
11 minutes ago
- Hans India
MF exposure in NBFCs grow 32.5 pc to reach Rs 2.77 lakh crore in May
New Delhi: The mutual fund exposure in the non-banking financial companies (NBFCs) grow 32.5 per cent to reach Rs 2.77 lakh crore in May, according to a new report. This year-on-year growth was driven by commercial papers (CPs) and corporate debt, which remained over Rs 2 lakh crore for 14 consecutive months, according to a CareEdge Ratings report. The previous records were Rs 2.69 lakh crore in April this year and Rs 2.64 lakh crore in July 2018. However, the share of NBFC credit in total bank credit decreased from 9.3 per cent in May 2024 to 8.5 per cent in May this year, the data showed. The mutual fund industry's total assets under management (AUM) rose to Rs 72.2 lakh crore in May from Rs 70 lakh crore in April. The industry witnessed net inflows of Rs 29,108 crore during the month, with 65 per cent flows from the equity category, according to the latest AMFI data. AUM of equity funds rose 4.83 per cent on-month to Rs 32.05 lakh crore, driven by positive flows and mark-to-market (MTM) gains. Flexi caps witnessed inflows of Rs 3,841 crore, the highest in the equity category for the third straight month. Hybrid fund assets grew 4.43 per cent to Rs 9.55 lakh crore, driven by highest monthly net inflows for the category worth Rs 20,765 crore and MTM gains. Arbitrage funds witnessed the highest inflows within the category, amounting to Rs 15,702 crore. Passive funds category witnessed net inflows of Rs 5,525 crore during the month, marking the 55th consecutive month of net inflows. Gold exchange-traded funds (ETFs) witnessed net inflows during the month, compared with outflows in the previous two months, driven by geopolitical tensions, market volatility and rate cut expectations.
