Today marks one year of Operation Sindoor, the tri-service military operation launched by India on the night of 6-7 May 2025 in response to the Pahalgam terror attack in Jammu & Kashmir that claimed 26 lives.
Events of this nature often create periods of uncertainty, not only socially and politically, but also across financial markets.
Historically, geopolitical tensions have tended to shift investor attention toward the defence sector. During periods of global instability, defence-related businesses are often viewed as relatively resilient, with the sector frequently outperforming broader markets.
This trend has been visible across major global conflicts, including the Russia–Ukraine war, the Israel–Hamas conflict, and recent US–Iran tensions.
Defence Stocks Performance
Here’s a look at how major Indian defence stocks performed over the last 12 months:
In contrast, Hindustan Aeronautics (HAL) and Bharat Dynamics (BDL) recorded relatively muted returns, indicating that investor participation within the defence theme remained selective despite strong sectoral interest. The divergence also suggests that markets increasingly reward companies with stronger execution visibility, niche technological capabilities, and scalable order books.
Defence Mutual Fund Performance
The strong narrative around defence and strategic manufacturing also translated into robust flows toward defence-focused mutual funds and index products.
Here’s how key defence-oriented mutual funds performed over the last year:
| Fund Name | 1Y Returns |
| HDFC Defence Fund Direct – Growth | 28.80% |
| Motilal Oswal Nifty India Defence Index Fund Direct – Growth | 26.95% |
| Aditya Birla Sun Life Nifty India Defence Index Fund Direct – Growth | 26.81% |
| Groww Nifty India Defence ETF FoF Fund Direct – Growth | 26.00% |
Defence-focused mutual funds generated strong double-digit returns over the past year, broadly mirroring investor optimism toward India’s defence manufacturing ecosystem. The HDFC Defence Fund emerged as the top performer among the listed schemes, benefiting from active allocation across high-growth defence and aerospace companies.
Meanwhile, passive index-based products from Motilal Oswal, Aditya Birla Sun Life, and Groww delivered relatively similar returns, suggesting that the broader defence basket itself remained resilient through the year.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
