Defence Stocks Rally up to 8% as US Strikes Iran; Apollo Micro, ideaForge Lead Surge

Stocks of Indian defence companies rallied sharply on June 23, 2025, after the US launched missile strikes on Iran over the weekend. As tensions between Israel and Iran escalate, investors flocked to defence stocks on the hopes of bigger orders and more government support. While the Nifty and Sensex fell over 1% due to overall market weakness, several defence-related stocks gained as much as 8%.

Top Gainers in Defence Sector

Apollo Micro Systems was the biggest gainer, rising 8% in intraday trade. Other companies like ideaForge Technology and Swan Defence and Heavy Industries also jumped up to 5%. Additional gainers included Avantel, Paras Defence, Premier Explosives, Astra Microwave, Garden Reach, DCX Systems, Mazagon Dock, Data Patterns, and Cochin Shipyard — all of which rose between 1.5% and 4.9%.

Strong Comeback After 5-Month Lull

The defence sector had struggled for 5 months due to high valuations, but made a comeback in March 2025. This recovery gained momentum with India’s successful ‘Operation Sindoor’ and the government’s push for indigenous defence under the 'Make in India' programme.

Rising Orders and Optimism Fuel Momentum

The recent surge in defence stocks isn't solely driven by geopolitical tensions. Robust earnings in the March quarter and expanding order books have also played a key role. According to ICRA, defence companies are expected to see revenue growth of 15%–17% in FY26. The sector’s strong Order Book to Operating Income (OB/OI) ratio of 4.4x at the end of FY25 signals healthy execution and growth momentum going forward.

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Conclusion

Rising global tensions, strong order pipelines, and government support are boosting investor confidence in defence stocks. With the US now directly involved in the Iran-Israel conflict, expectations of higher defence spending and increased domestic production may keep the sector in focus going forward.

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