Shares of major Indian defense companies soar to record highs
What's the story
Shares of major Indian defense companies, including Hindustan Aeronautics (HAL), Bharat Dynamics (BDL), Bharat Electronics (BEL), and BEML, soared to record highs on Monday. This surge followed exit poll predictions suggesting a strong win for the Narendra Modi-led NDA government, which could lead to policy continuity. If the predictions hold true, it would mark the first time since the 1960s that an incumbent Prime Minister returns for a third consecutive term with a comfortable majority.
Policy impact
Anticipated policy continuity fuels defense stocks
The anticipated return of the Modi 3.0 government is expected to maintain focus on developing public infrastructure, including defense, digital infrastructure, and green technologies. This expectation was voiced by Axis Securities and echoed by Kotak Institutional Equities, who stated that the government will continue its focus on key areas such as defense and manufacturing. This anticipation led to a significant climb in several defense stocks.
Stock surge
Stellar performance of defense stocks on NSE
Hindustan Aeronautics stock rose by 9.45% to hit a record high of ₹5,444 apiece on the National Stock Exchange (NSE). The stock has delivered impressive returns of around 88% this year and has rallied 180% in the last one year. According to Bloomberg, out of 16 analysts tracking HAL, 14 have a 'buy' rating on the stock.
BDL surge
Bharat Dynamics's stock soars on NSE
Bharat Dynamics's stock also experienced a significant rise, increasing by as much as 6.7% during the day to ₹1,662.95 apiece on NSE. The stock has risen 88% on a year-to-date basis and surged by an impressive 187.28% in the last one year. According to Bloomberg data, seven out of the 10 analysts tracking Bharat Dynamics have a 'buy' rating on the stock.
Market records
Bharat Electronics and BEML stocks hit record highs
Shares of Bharat Electronics and BEML Limited, formerly Bharat Earth Movers Limited, also surged over 9% to hit fresh record highs of ₹323 and ₹4,800, respectively, on NSE. The Indian stock market benchmarks, Sensex and Nifty 50, also surged over 3% each to new record highs on Monday. This surge was fueled by prospects of political stability and policy continuity.