Defence stocks continued their upward momentum for the second consecutive day on Thursday, February 26, as investor sentiment strengthened ahead of a possible India–Israel defence agreement. The Nifty India Defence index was up 1.07 per cent in early trade.
Astra Microwave Products emerged as the top gainer, rising more than 4.25 per cent to Rs 8,181.80. Data Patterns followed with a 3.7 per cent jump. Shares of Unimech Aerospace and Manufacturing Limited and Solar Industries India also climbed nearly 3 per cent.
Among major names, Bharat Dynamics Limited (BDL) and Bharat Electronics Limited (BEL) gained around 1.5 per cent each. Hindustan Aeronautics Limited (HAL) and Paras Defence and Space Technologies were also trading in positive territory.
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The rally comes as markets look ahead to possible announcements during Prime Minister Narendra Modi’s two-day state visit to Israel, which began on February 25. This is his first visit to Israel since 2017, when he became the first Indian Prime Minister to undertake a standalone trip to the country.
What could the India–Israel agreement include?
Media reports suggest that the upcoming agreement may focus more on technology transfer for advanced weapons systems rather than outright arms purchases. According to The Times of India, the emphasis could be on gaining access to high-end technologies, some of which Israel has not previously shared with other countries.
Addressing the Knesset, Israel’s Parliament, Modi underlined the strategic importance of defence cooperation, saying that in an uncertain global environment, strong partnerships between trusted nations like India and Israel are vital.
Missile defence is expected to play a key role. Earlier, Modi had outlined “Mission Sudarshan Chakra” in his Independence Day speech, describing a roadmap for building a multi-layered missile defence shield for India.
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The Times of India also reported that the proposed memorandum of understanding (MoU) could cover both defensive systems and offensive weaponry. Possible collaboration areas may involve Israel Aerospace Industries, Rafael Advanced Defence Systems and Elbit Systems, though official details are yet to be announced.
Market experts say the renewed focus reflects both strategic intent and improving domestic order visibility. Jickson Sajee of INVasset PMS noted that India–Israel ties have long centred on defence cooperation in missiles, UAVs and surveillance systems, and the visit signals continuity.
Seema Srivastava of SMC Global Securities highlighted HAL and BEL as structural beneficiaries due to strong order books and steady growth, while noting that Mazagon Dock Shipbuilders Limited remains strategically important. She added that BDL faces near-term execution challenges, though sustained order inflows could unlock long-term value.
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