Defence Stocks In Focus: ZEN, BEML, Data Patterns Rally While HAL, Cochin Shipyard Slide – What’s Driving the Divergence?

India's defence stocks were in the spotlight all through last week, the trend continues as Zen Technologies, Bharat Earth Movers Limited (BEML), Data Patterns (India) witnessed an upswing in Monday's trade at a time when India's stock market witnesses a tight consolidation bandwidth.

The ongoing trading session marks the seventh consecutive gain for defence stocks with the Nifty Defence Index jumping 3 per cent to an intra-day high of 8,555, which results in a total gain of 24 per cent.

India's homegrown defence capabilities were at display when tensions were rife with Pakistan. This along with PM Modi's call for Make In India defence equipments, and expectations that the centre may increase defence spending has buoyed the rally defence stocks witness on D-street.

In addition, the Q4 results of defence companies released so far have met analysts’ expectations, supporting the ongoing rally on Dalal Street.  Further escalating investor optimism were reports circulating claiming that over a dozen countries have shown interest in purchasing the BrahMos missile system after ‘Operation Sindoor’.

Defence Stocks In Focus Today

In today’s trade, drone stock ZEN Technologies (ZENTEC) saw its share price rise 5 per cent to the upper circuit limit Rs 1,884.45  in the morning trade on Monday, post the declaration of Q4 results and a dividend over the weekend.

ZENTEC reported a significant 189 per cent year-on-year (YoY) rise in the consolidated net profit to Rs 101.04 crore for the quarter ended March 2025, as compared to Rs 34.94 crore during the same period previous year.

Meanwhile, the manufacturer of heavy equipment, BEML witnessed a 5.22 per cent surge to Rs 3,850 apiece ahead of its board meet on May 23 to consider and approve the standalone and consolidated audited financial results, and mull over an dividend announcement.

On the other hand, defence and aerospace solutions provider Data Patterns (India) rallied over 9 per cent to Rs 3,141.70 after the  standalone net profit surged 60.45 per cent to Rs 114.08 crore in Q4 FY25 as against Rs 71.10 crore posted in Q4 FY24.

The company's revenue from operations increased 117.35 per cent YoY to Rs 396.21 crore in the quarter ended 31 March 2025.

While the aforementioned stocks pulled up the defence sector, shares of Garden Reach Shipbuilders and Engineers Ltd. (GRSE), Hindustan Aeronautics Ltd. (HAL), and Mazagon Dock Shipbuilders Ltd. dragged the sector down.  

Factors supporting a rally in defence stocks

Additionally, India’s locally manufactured defence products are attracting growing global interest, with defence exports surging to a record high of Rs 23,622 crore in the financial year 2024–25. The government is now eyeing for annual exports worth Rs 50,000 crore by 2029, to strengthen its global footprint.

As per an official release, "This expansion in both production and exports underscores India’s commitment to building a robust and self-sufficient defence industrial base. Strategic policy interventions have played a key role in strengthening this sector, boosting not just domestic capability but also enhancing India’s presence in the global defence market."