5 Stocks from Key Sectors That Fell 25% Due to the Direct Impact of the Middle East Conflict

Synopsis: The 2026 Iran war has disrupted global oil supply and trade routes, sharply impacting India’s economy. Rising crude prices, supply chain issues, and investor outflows have led to significant declines in major stocks across sectors.

The 2026 Iran War erupted on end of February, when the United States and Israel launched a joint surprise military strike on Iran, killing Supreme Leader Ali Khamenei and triggering a massive retaliatory barrage of missiles and drones across the region.

It began as a failed diplomatic effort over Iran’s nuclear programme, quickly turned into a full-blown regional conflict, shutting down the Strait of Hormuz, which is a narrow chokepoint through which nearly a fifth of the world’s oil flows and sending shockwaves across global energy and financial markets.

For India, a country that imports over 85% of its crude oil, the fallout has been swift and severe. Foreign Portfolio Investors have aggressively pulled out of Indian equities, offloading from many trading sessions in March. From airlines grounding flights to oil refiners bleeding margins and infrastructure giants fearing project delays, the conflict has dragged down some of India’s biggest names, with five marquee stocks alone shedding up to 25% of their value in a matter of weeks.

Larsen & Toubro Ltd

Larsen & Toubro Ltd (L&T) is one of India’s largest and most diversified engineering and construction conglomerates. It operates across sectors like infrastructure, heavy engineering, power, defence, manufacturing, and IT services. Known for large-scale projects in infrastructure and industrial systems. 

With a market capitalisation of Rs. 4,70,780 cr, the shares of Larsen & Toubro Ltd were trading at Rs. 3,422.35 per share, increasing from its previous close of Rs. 3,341.90 per share. 

Nearly 49% of L&T’s consolidated order book comes from international projects, with around 80% of that concentrated in the UAE, Saudi Arabia, and the wider Middle East, accounting for roughly 37% of its total order book. Recognising the region’s strategic importance, the company said it is closely monitoring the evolving situation.

Macquarie has warned that Larsen & Toubro (L&T) faces heightened execution and earnings risks due to its significant exposure to the Middle East amid the Iran–US conflict. Potential threats include project delays or cancellations from damage to infrastructure, worker safety concerns, and logistical or cost challenges, all of which could pressure margins and disrupt L&T’s engineering and construction operations if the conflict escalates. The stock has lost around 20% since the conflict began, with analysts flagging execution and earnings risks if the situation prolongs.

Interglobe Aviation Ltd 

Interglobe Aviation Ltd is the parent company of IndiGo, India’s largest airline by market share and one of the fastest‑growing low‑cost carriers globally. Based in Gurugram, it runs a vast domestic and international network with hundreds of aircraft, offering affordable air travel with a focus on punctuality and operational efficiency.

With a market capitalisation of Rs. 1,56,752 cr, the shares of Interglobe Aviation Ltd were trading at Rs. 4,054 per share, increasing from its previous close of Rs. 3,946.55 per share. 

IndiGo disclosed that over 500 flights to the Middle East and select international destinations were cancelled between February 28 and March 3 due to evolving airspace restrictions. The airline said it is closely monitoring the impact on revenue while adjusting schedules and coordinating repatriation efforts with authorities. 

Flight disruptions for IndiGo are still continuing due to the ongoing Middle East conflict, even though some services have partially resumed. The airline is operating only select flights under dynamic and restricted schedules, particularly on routes to the Gulf region, and has repeatedly warned passengers about last-minute changes, delays, and possible cancellations. 

Aviation Turbine Fuel (ATF) makes up a large amount of an airline’s costs, and estimates suggest that for every $5 increase in Brent crude, IndiGo’s Earnings Per Share could fall by around 13%.  The dual blow of mass cancellations and soaring fuel costs has wiped out roughly 16% of the stock’s value.  

Hindustan Petroleum Corporation Ltd

Hindustan Petroleum Corporation Ltd (HPCL) is a major Indian state‑owned oil and gas company engaged in refining and marketing petroleum products. It owns and operates large refineries on India’s coasts and produces lubricants, while also expanding energy infrastructure to meet the country’s fuel demand.

With a market capitalisation of Rs. 68,622 cr, the shares of Hindustan Petroleum Corporation Ltd were trading at Rs. 322.50 per share, increasing from its previous close of Rs. 319.25 per share.  

Iran’s strikes on a Qatari LNG facility and the effective shutdown of the Strait of Hormuz have further tightened supply, pushing oil prices up around 50% since the conflict began. HPCL’s shares have tumbled 25%, making it one of the worst-hit stocks in the broader market.

Aegis Vopak Terminals Ltd

Aegis Vopak Terminals Ltd is an Indian company, jointly owned by Aegis Logistics and Royal Vopak, that operates one of India’s largest networks of liquid and gas storage terminals. It offers safe storage and handling of LPG, chemicals, petroleum products, and edible oils, with logistics connections by road, rail, and pipelines.

With a market capitalisation of Rs. 18,985 cr, the shares of Aegis Vopak Terminals Ltd were trading at Rs. 171.35 per share, decreasing from its previous close of Rs. 175.75 per share.  

Following the closure of the Strait of Hormuz, India is facing a significant shortage of LPG supplies, intensifying pressure on the energy and chemical sectors. The company, which operates storage terminals for LPG and chemicals, is directly impacted by these disruptions, as its facilities play a key role in handling and distributing these critical commodities across the country. The stock has dropped 25% amid rising concerns over supply disruptions. 

Maruti Suzuki India Ltd 

Maruti Suzuki India Ltd is India’s largest passenger car manufacturer and a subsidiary of Japan’s Suzuki Motor Corporation. It pioneered the mass automobile market in India and continues to dominate with a wide range of vehicles, extensive sales and service networks, and initiatives to enhance customer convenience.

With a market capitalisation of Rs. 3,91,116 cr, the shares of Maruti Suzuki India Ltd were trading at Rs. 12,440 per share, increasing from its previous close of Rs. 12,354.05 per share.  

The West Asia conflict is disrupting India’s auto sector by affecting key shipping routes, raising freight costs, and delaying exports, putting nearly $1 billion worth of shipments at risk. It has also constrained supplies of essential raw materials like plastics, rubber, and petrochemicals due to LPG shortages and halted operations by suppliers. 

These challenges, along with higher logistics costs and potential production bottlenecks, could pressure margins and impact the broader industry if the situation persists. Following this, the stock is down by 16%. 

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