Israel-Iran Conflict: Defence stocks and their exposure to Israel, export markets

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India's defence companies bucked the trend in what has been an otherwise sombre day for India's equity markets. The deteriorating geopolitical scenario between Israel and Iran has led to a surge in shares of Defence companies. Shares of Garden Reach Shipbuilders surged up to 6%, while those of Zen Technologies and Cochin Shipyard gained between 4% and 5%.

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Bharat Electronics | Total exports make up 4-5% of its revenue. The quantum of its exports to Israel is not specified. The company is in advanced stages of talks with Israel original equipment manufacturer (OEM) IAI to set up a joint venture company to provide product life support for weapon system programmes in India. The Israel OEM is the main designer. The company had earlier faced supply chain issues amid the Israel-Palestine war, particularly for LRSAM and other issues in getting some sub-system supplies from Israel companies.

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Premier Explosives | Total exports make up 13% of the company's order book. It has supplied motors and explosives to Israel in the past.

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Hindustan Aeronautics Ltd. (HAL) | The company's exports makes up less than 7% of its revenue. It has signed MoUs with some Israeli companies for joint development of UAVs to be supplied to Indian Defence Forces.

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Bharat Dynamics | Exports make up 13% of its total order book. The company imports missiles components such as Astra, Akash, SAM systems, from Elbit, IAIA, etc, and assembles them in India.

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Paras Defence | Exports make up 16% of its total revenue. The quantum of the company's exports to Israel is not disclosed. Its customers include Israel Aerospace Industries, among others. It has a joint venture with CONTROP Precision Tech for electro-optics/infrared (EO/IR) payloads for land, air and naval applications.