Indian Defence Shares after Middle East Conflict: Defence company shares are getting attention again after the United States and Israel carried out strikes against Iran. What first started as talks about a nuclear deal between the US and Iran suddenly turned into open war on February 28. The situation became very serious and deadly. Many top leaders of the Islamic Republic regime were killed, including its supreme leader Ali Khamenei.
Tension in Gulf Countries
The Middle East was already tense since October 2023 when Israel declared war against Hamas in Gaza. Hamas is supported and funded by Iran. Because of that, the region has been unstable for a long time. Whenever war fears rise, investors usually turn their eyes toward aerospace and defence companies.
Experts believe this new attack has brought more attention to defence shares than any other global tension since the Russia-Ukraine war began in 2022.
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Jurica Dujmovic, a columnist at MarketWatch, explained how investors usually react. He said, “defense stocks have been treated as a geopolitical barometer. When tensions rise and military conflict breaks out, shares climb. When headlines cool, the trade fades. It’s a narrative built around procurement cycles and crisis-driven spending. The attack on Iran on Saturday by the U.S. and Israel should repeat this pattern for defense stocks in coming days.”
But the report also said something deeper is happening in the defence industry. It is not only about selling weapons during wars. The business model is slowly changing. Some parts of the defence sector now look more like subscription businesses. Companies are earning steady recurring revenue from long-term service contracts instead of only one-time weapons sales.
Biggest Defence Companies in World
Currenty 6 American companies are among the top 10 largest defence contractors in the world by market value.
- RTX is at number one with a market cap of $271.97 billion.
- Honeywell stands at third place with $164.14 billion.
- Lockheed Martin is fourth with $152.27 billion.
- Northrop Grumman comes fifth with $103.38 billion.
- General Dynamics holds sixth position with $96.54 billion as of February 27, 2026.
- L3Harris Technologies is ninth with $68.18 billion.
Defence stocks in America
Before the US and Israel launched missiles at Iran, defence stocks in America were already rising. On February 27, these big US defence companies gained between 2% and 3%. At the same time European defence shares did not perform as well.
Safran from France, which is the second largest defence contractor in the world with a market cap of $167.43 billion, dropped by almost 2%. Germany’s Rheinmetall and the UK’s BAE Systems slipped between 0.3% and 0.8% in the last session. Both are also part of the global top 10 list.
Defence stocks in India
In India, three government-backed defence companies are among the top 35 global defence contractors.
- BEL is currently India’s biggest defence company and stands fifteenth globally with a market cap of $35.70 billion.
- HAL is nineteenth with $28.74 billion.
- BDL ranks thirty-fourth with $5.09 billion.
These three Indian stocks but fell between 1% and 2.5% last Friday alone. Investors are now watching closely to see if Indian defence shares will follow the US rally on Monday, March 2, 2026.
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Defence Stocks Performance in India
The Nifty India Defence index ended February on a positive note. It is now at 8,126.80 and has gained 6.41% in one month. Still, on February 27 alone the index fell by 1.06%, but overall it finished the month higher.
BEL
In the past 30 days, BEL stock climbed 6.3%. On the other hand BDL dropped by 10.07% and HAL declined by 13.96%. Cyient DLM also fell by more than 10.3%. Mazagon Dock slipped 4.71%. Paras Defence & Space went down 2%. Cochin Shipyard lost nearly 1.4% in one month.
Other Companies
- MTAR Technologies jumped 51.10% in just one month and became the top gainer. Data Patterns rose 39.20%.
- Bharat Forge gained 34.6%. Dynamatic Tech increased 26.34%.
- Astra Micro added 6.5%. Solar Industries moved up 6%.
- Unimech Aerospace climbed 9%.
- Midhani, GRSE and Zen Tech each gained close to 2%.
The country is targeting Rs 50,000 crore in defence exports. For FY27, the government announced a record defence budget allocation of Rs 7.85 lakh crore.
Defence Stocks To Buy:
- Choice Broking has recommended BUY on seven defence stocks.
- Apollo Micro Systems: BUY for Rs300 Target.
- Azad Engineering: BUY for Rs 1,900 Target
- Bharat Dynamics: BUY For Rs 1,965 Target
- Bharat Electronics: BUY For Rs 550 Target
- Centum Electronics: BUY For Rs 3,000 Target
- Data Patterns: BUY For Rs 3,600 Target
- Hindustan Aeronautics: BUY For Rs 4,780 Target
- Zen Technologies; BUY For Rs 2,150 Target
