Shares of Tejas Networks, Paras Defense and Spaces, ideaForge Technology, Bharat Electronics (BEL), Hindustan Aeronautics (HAL) surged upto 15% on Monday, March 2 following heightened geopolitical tensions in West Asia, resulting in a full-scale war in the area.
According to experts, defense stocks typically respond favorably to such conflicts, as they lead to an increased need for defense equipment and the components necessary for their production.
Harshal Dasani, Business Head, INVasset PMS, explained that Defense stocks are witnessing renewed investor interest. Heightened geopolitical tensions increase the probability of higher global defense spending, faster procurement cycles, and policy prioritization of indigenous manufacturing. India has already been on a structural defense push with rising budget allocations and a strong focus on domestic production. Any prolonged conflict globally tends to accelerate capital allocation toward security and strategic capability.
“While short-term volatility cannot be ruled out, defense stocks often act as relative outperformers during periods of geopolitical stress, whereas aviation remains sensitive to oil volatility and demand uncertainty,” said Dasani.
