Middle East crisis: Indian companies linked to Israel you should know about

The ongoing conflict in the Middle East has had a significant impact on the global economy, including India’s stock market.

As Iran launched its largest missile attack on Israel, investors in India felt the tremors, with the Sensex falling by over 1,700 points on Thursday.

The decline has left many wondering how this conflict, taking place thousands of miles away, could affect Indian companies, especially those with ties to Israel.

There are at least 14 listed Indian companies that have a presence or business connections in Israel. For some of these companies, the impact could be limited, while others may face more significant challenges.

One of the most prominent Indian companies linked to Israel is Adani Ports. The company owns a significant stake in the Haifa Port, one of Israel’s busiest ports.

Amid the escalating conflict, Adani Ports’ shares fell by as much as 2.5%, reaching a day’s low of Rs 1,429.35 on the Bombay Stock Exchange (BSE). The company’s investments in Israel have drawn attention as the situation in the region unfolds.

Pharmaceutical giants

Sun Pharmaceutical, India’s largest drugmaker, has a strong presence in Israel through its majority stake in Taro Pharmaceutical. While the stock traded flat on the day, analysts and investors are keeping a close eye on how the conflict might impact operations.

Other pharmaceutical giants, such as Dr. Reddy’s and Lupin, are also under scrutiny due to their connections to Tel Aviv-based Teva Pharmaceutical, a key player in the global generic drugs market.

Technology and financial services

Several Indian IT companies, including Tata Consultancy Services (TCS), Wipro, Tech Mahindra, and Infosys, have a presence in Israel.

These companies are crucial for providing tech services and support to various industries in Israel. While the immediate impact on their operations may be minimal, the uncertainty in the region has left investors vigilant.

In the financial services sector, the State Bank of India (SBI) also has connections in Israel. However, the bank’s broader global operations and strong position in India mean that it may be better equipped to weather any potential disruptions in the region.

Beyond the tech and pharmaceutical sectors, other Indian companies with ties to Israel include NMDC, a leading mining company, and jewelers like Kalyan Jewelers and Titan, both of which have connections to Israel’s diamond industry.

Larsen & Toubro (L&T), a leading engineering and construction company, also has a presence in Israel. While these companies are monitoring the situation, their operations may not be immediately affected by the conflict.

Oil prices and global market concerns

The ongoing conflict has also raised concerns about the potential disruption of oil supplies, which could have a ripple effect across industries. As Israel and Iran remain at odds, the threat of retaliation, particularly targeting Iran’s oil infrastructure, has added to the uncertainty.

Brent crude futures rose by over 1%, approaching the $75 per barrel mark, as fears of a broader regional conflict growing. The rise in oil prices has already started to impact sectors reliant on crude oil as a raw material.

For instance, shares of companies like Asian Paints and Berger Paints, which use crude oil for production, fell by 3-4%. similarly, tire manufacturers Apollo Tires, MRF, and JK Tire also saw their stock prices drop by 2-4%.

Given the uncertainty surrounding the conflict, analysts are advising investors to proceed with caution.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “Investors should watch the emerging situation very closely. A partial switch in portfolios to defensives like pharma and FMCG also can be thought of.”