Why did the DroneShield share price rocket in March?

The DroneShield Ltd (ASX: DRO) share price had a month of ups and downs in March.

But the good news for the counter drone technology company's shareholders is that there were more ups than downs.

As a result, the company's shares defied the market weakness and recorded a strong gain.

Over the course of March, the DroneShield share price rose a sizeable 17.5%.

As a comparison, the ASX 200 index lost 4% of its value during the 31 days.

Why did the DroneShield share price jump in March?

There were a few reasons why investors were bidding the company's shares higher last month.

The first is broad strength in defence stocks, which has been driven by optimism over spending in this side of the economy.

This has seen the Betashares Global Defence ETF (ASX: ARMR) rise 15.5% since the start of the year, whereas the ASX 200 index is down almost 4.5% over the same period.

In addition to this, there was some news that may have given the DroneShield share price a boost.

This was that Regal Partners Ltd (ASX: RPL) has taken advantage of a pullback in its share price since late 2024 to increase its stake in the company.

Regal Partners snapped up around 13 million shares at the end of February to boost its interest from 5.69% to 7.2%. It clearly thinks the company has a bright future!

Anything else?

The company released its full year results in late February, which caused a drop in the DroneShield share price.

Some investors may believe that this created a buying opportunity and loaded up on its shares.

Bell Potter certainly would have supported this buying. The broker recently put a buy rating and $1.10 price target on its shares. It said:

Whilst DroneShield's performance over the last 12-months did not meet expectations, the near-term outlook is considerably more positive. The value of contracts received YTD (~$47.8m) is evidence of increased levels of customer activity and DRO is well placed to meet this demand having materially increased the scale of its operations and heavily invested in its inventory levels. We retain our BUY recommendation.

Incidentally, due to the recent market selloff, the DroneShield share price has pulled back meaningfully from its highs.

As a result, Bell Potter's recommendation is now firmly in play again and its price target of $1.10 implies potential upside of 21% for investors over the next 12 months.

In light of this, if the market can find its legs in April, don't be surprised if DroneShield shares outperform again.