The Nifty Defence Index has emerged as a frontrunner in the current market recovery phase that started on March 4, surpassing other sectors amidst a correction driven by various domestic and global factors. Since hitting the market bottom in early March, the Nifty India Defence Total Return Index has demonstrated an impressive 17 per cent increase, leading the pack ahead of Nifty PSE and BSE India Infrastructure indices which saw gains of 11 per cent and 10.6 per cent respectively.
Several defence stocks have seen significant growth since March 4. Garden Reach Shipbuilders & Engineers experienced a 35 per cent surge, while Zen Technologies and JNK India rose by 32 per cent and 30 per cent respectively. These gains were partly spurred by the European Union’s announcement of an €800 billion rearmament plan, which may include support for Ukraine following the suspension of US military aid to the country.
The sector received a further boost on March 20 when the Defence Acquisition Council approved eight major capital acquisition proposals worth over ₹54,000 crore. These acquisitions are aimed at enhancing the capabilities of India’s Army, Navy, and Air Force. Experts believe that the combination of increasing global defence allocations and India’s focus on self-reliance in defence production will drive investments in the sector.
The article was originally published on March 24, 2025.
