Aray Industries Stock Surges on Two New Defense Deals

Aray Industries, an Israeli defense technology company, saw its stock price jump significantly on Monday, reaching a market value of approximately 1.8 billion shekels. This surge followed the announcement of two new major contracts.

Despite the recent gains, the company's stock has fallen about 70% since its peak in January of this year. This decline is attributed to a broader slowdown in the defense sector, following a period of intense conflict and subsequent relative calm in various war zones, after substantial growth in previous years.

Aray's subsidiary, Reshef Technologies, secured an operational order worth around $16 million from BEL, a major Indian defense firm and Reshef's strategic partner. This order, for the supply of fuzes, is for the third year of a ten-year commercial agreement signed in December 2024. Approximately $6 million of this order fulfills a previously reported conditional order, and thus does not alter the company's reported order backlog. Delivery is expected in 2027.

Production for this order will occur at Reshef's facilities in Israel. This decision comes after BEL announced a one-year delay, with a potential further delay, in commencing local production in India. While shifting production to Israel boosts Reshef's output in the short term, it signifies a delay in establishing a joint production line in India, a key component of the long-term agreement aimed at integrating Reshef into India's defense supply chain.

"Receiving the operational order proves the robustness of the agreement in the Indian market and its accelerated realization within our ongoing activity there," stated Aray Industries CEO Chaim Steller. "Reshef continues to solidify its position as a key link in the supply chain in one of the world's largest and fastest-growing defense markets, with our ability to provide precise and reliable technological solutions enabling us to deepen our presence in strategic markets."

In addition to the Indian contract, Aray announced it won a tender to supply artillery fuzes to a South American country. The company has also recently reported entering the European market through an agreement to produce and market fuzes for NATO countries, and establishing a production base in the United States. Alongside its expansion in artillery systems, Reshef is developing fuzes for unmanned aerial vehicles and loitering munitions, areas the company identifies as significant growth engines with increasing international demand.