Ideaforge, Data Patterns, Paras Defence, BEL, BDL among defence stocks rising up to 15%; here's why

Defence stocks: Ideaforge Technology Ltd, Data Patterns (India) Ltd, Paras Defence and Space Technologies Ltd, Bharat Electronics Ltd (BEL) and Bharat Dynamics Ltd (BDL) are among defence stocks rallying up to 15 per cent in Monday's trade as US-Israel strikes on Iran and the latter's retaliatory strikes on Middle East countries intensified geopolitical concerns, pushing shares of defence makers higher. Stock analysts believe the rise in defence shares is largely sentiment, noting that defence PSUs such as BEL and BDL in fact have supply dependence on Israel to an extent.    
Ideaforge Technology Ltd led the rally, rising 14.77 per cent to Rs 472.60 apiece. Paras Defence soared 11.18 per cent to Rs 709.70. Data Patterns climbed 4.28 per cent to Rs 3,346. BDL was trading 3.52 per cent higher at Rs 1,309.90. ZEN Technologies Ltd was trading 3.51 per cent higher at Rs 1,407. Astra Microwave Products Ltd added 2.91 per cent to Rs 996.65 while Hindustan Aeronautics Ltd (HAL) was quoting at Rs 3,975, up 1.56 per cent.

The Middle East conflict escalated over the weekend after the US and Israel bombed Iran. Iran’s retaliation by attacking other GCC countries heightened the seriousness of the situation, though the conflict is expected to remain relatively short, lasting from a few days to a couple of weeks, given the imbalance between the two sides and the depletion of Iran’s leadership.

Defence names including HAL and BEL could see sentiment support, JM Financial said. " Upstream energy and defence may see relative support, while oil-sensitive sectors such as OMCs, paints, tyres, aviation and chemicals face margin pressure," this brokerage said.

Antique Stock broking said BEL and BDL have their supply chain dependence on Israel. Any prolonged geopolitical issue with Iran can lead to supply chain risk for these companies, glimpse of which was earlier witnessed during Israel-Palestine conflict, it said.

The Middle East conflict escalated over the weekend after the US and Israel bombed Iran. Iran’s retaliation, including attacks on other GCC countries, heightened the seriousness of the situation. However, the conflict is expected to remain relatively short, lasting from a few days to a couple of weeks, given the imbalance between the two sides and the depletion of Iran’s leadership.

JM Financial said defence stocks such as HAL and BEL could see sentiment support. “Upstream energy and defence may see relative support, while oil-sensitive sectors such as OMCs, paints, tyres, aviation and chemicals face margin pressure,” the brokerage said.

Antique Stock Broking said BEL and BDL have supply chain dependence on Israel. Any prolonged geopolitical tensions involving Iran could pose supply chain risks for these companies, a glimpse of which was seen earlier during the Israel-Palestine conflict, it said.