Key Points
New Delhi: The narrative-driven surge in the stock prices of defence companies has now waned, with several of these stocks falling 20-40 percent in just a few months..
Analysts say that the sharp rise in these stocks post the COVID-19 pandemic was driven by newbie investors seeking to jump on the bandwagon of a booming stock market, and who were led to invest in these stocks by social media influencers...
These investors are now facing the reality of project delays and low profitability among defence companies...
A large part of this rally in defence stocks was driven by a perception and narrative that the Indian governments decision to increasingly source its defence procurement from the domestic industry would result in immediate gains for these companies...
As project delays became apparent and new orders to defence firms started flagging, investors began to lose interesta trend that has led to the recent sharp fall in the stock prices of several defence companies over the last few months...
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