Middle East Conflict and Indian Stocks

Conflict in the Middle East took a turn for the worse last week (30 Sep – 04 Oct 2024). With Iran launching an offensive on Israel, Israel has been exchanging missiles with Iran, Yemen, and Lebanon from the start of October. But does that affect Indian markets?

Here are 7 stocks with a presence in ME and how their market cap and stock prices reacted.

1. Adani Ports is the largest commercial port operator in India, handling almost 25% of the country’s cargo. It operates Haifa Port, the largest port in Israel, but it contributes less than 1% of Adani Ports’ total profits.
It has a market cap of ₹2.97 lakh Cr.
Adani Ports fell 3% through the week.

2. Bharat Electronics (BEL) has partners, suppliers, and customers in the Middle East, including the conflicting countries. However, as a defense products company, BEL is exempt from disclosing revenues by segment or geography.
BEL has a market Cap of ₹1.97 lakh Cr.
Last week, it fell 5.5%.

3. Kalyan Jewellers runs 253 jewellery stores, of which 36 are in the Middle East, specifically in the UAE, Qatar, Oman, and Kuwait. These countries are not involved in the war, but their presence in the Middle East could worry investors.
Kalyan Jewellers has a market cap of about ₹70K Cr.
Last week, it declined 0.88%.

4. Bharat Heavy Electricals (BHEL) makes less than 5% of its revenues from outside India, but it has a presence in Iran and Yemen, both countries in the middle of a conflict.
BHEL has a market cap of ₹89K Cr.
BHEL was the biggest loser last week, with a 6.9% fall.

5. AIA Engineering offers industrial engineering solutions to business clients. About 60% of its business comes from its Middle-Eastern subsidiary in the UAE. The geographical distribution of the subsidiary’s revenues is not known.
AIA has a market cap of ₹39K Cr.
It has tanked 1.4% over last week.

6. BLS International offers online visa application and consultancy services. It makes 39% of its revenues from the Middle East. A further breakdown of revenues is not known, but BLS has a presence in Israel and Lebanon, both of which are among the conflicting nations.
BLS International has a market cap of ₹14K Cr.
BLS was among the biggest losers last week, with a decline of 6.8%.

7. Paras Defense provides defense engineering solutions. About 14% of its revenues come from outside India. It has not mentioned a breakdown of foreign revenues, but it has mentioned Israel at the top of the list of countries it exports to.
Paras has a market cap of roughly ₹4K Cr.
It gained 0.5% last week, which is probably the only gainer among the lot.

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