The Indian defence sector stocks continued their bullish momentum on Monday, further recovering lost ground. Companies like Hindustan Aeronautics Ltd (HAL), Bharat Dynamics, and Garden Reach Shipbuilders have witnessed a significant uptrend, surging up to 35% in March 2024.

The combined market capitalization of key defence stocks, including Bharat Electronics, Mazagon Dock Shipbuilders, Cochin Shipyard, and BEML, has increased by ₹1.6 lakh crore this month. This has pushed their total market capitalization to a massive ₹7.2 lakh crore.

Defence Stocks Driving Market Gains

Interestingly, this increase accounts for nearly 5% of the total market capitalization gain of all listed companies on the Bombay Stock Exchange (BSE). The overall market cap of all listed firms on the BSE surged by ₹35 lakh crore, reaching ₹418.6 lakh crore during the same period.

Market experts believe that Public Sector Undertakings (PSUs) will continue to drive the ongoing bull market, despite occasional corrections. Veteran investor Ramesh Damani expressed confidence in the strength of PSU stocks, citing improved corporate governance and robust earnings growth as key factors fueling their rise.

"PSU stocks will continue to drive the bull market, supported by improved corporate governance, which has strengthened their earnings profile. Some PSU construction and defence companies still excite me," said Damani in an exclusive interview with CNBC-TV18.

Government Initiatives Boost Defence Stocks

One of the biggest catalysts for this surge was the Defence Acquisition Council's (DAC) approval of capital acquisition proposals worth ₹54,000 crore last week. This decision is expected to benefit defence vendors such as Bharat Dynamics and Bharat Electronics, further strengthening the sector.

Moreover, the DAC has introduced new guidelines to shorten defence procurement timelines, ensuring faster execution of contracts and boosting investor confidence.

Stock Performance Highlights

• Hindustan Aeronautics Ltd (HAL) shares surged by 6.7% on Monday, reaching ₹4,154.

• Out of 16 analysts covering HAL, 15 have a "buy" rating, indicating strong confidence in its future growth.

• Bharat Dynamics and Bharat Electronics continue to gain traction, with investors anticipating further contract wins.

What’s Next for Defence Stocks?

With continued government support, strong order books, and improved financial performance, the Indian defence sector remains a high-potential investment avenue. The upcoming months will be crucial in determining whether this bullish momentum can sustain amid market fluctuations.

For more updates on the latest IPOs, share market trends, and stock market insights, explore our Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today section.

Stay updated with Top News Headlines - Share Market News, Latest IPO News, Business News, Economy News for real-time updates on the financial markets.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst & Finance Saathi Telegram Channel for Regular Share Market, News & IPO Updates.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.