Now, India has a unique opportunity to harness about ₹1.8 trillion in domestic manufacturing potential through the indigenisation of drones for security and commercial use.
The Indian drone industry is expected to grow exponentially over the next decade, with analysts predicting a compound annual growth rate (CAGR) of 80% over FY22-27.
Here are five top drone stocks that could be ready to soar as India’s drone industry takes off.
#1 IdeaForge Technology
IdeaForge is a globalleader in drone technology, creating and producing unmanned aerial vehicle (UAV) systems for security and surveillance purposes.
It holds a dominant position in the Indian UAV market, with a 50% market share in FY22, and caters to both the civil and defence sectors.
IdeaForge offers a range of defence-oriented drones. These likely include solutions for surveillance and reconnaissance missions, security patrols, and target acquisition to support other military assets. In January it won a ₹48 crore contract from the Indian Army for counter-drone technology.
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The company has partnered with Garuda Aerospace, another leading drone maker, for product development and manufacturing as the two companies look to benefit from their combined skills and resources.
IdeaForge is well-positioned to capitalise on the projected growth of India’s drone industry between FY22 and FY27. It stands to benefit from increased demand across the defence, commercial, and industrial sectors.
In Q1 FY25 the company’s financial performance declined significantly. Revenue fell by 11% YoY to ₹86 crore in the June quarter while net profit tanked 90% to ₹2 crore.
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The company’s order book shrank to ₹54.2 crore at the end of the June quarter (the lowest level in four quarters), from ₹120 crore at the end of the March quarter.
The company plans to focus on performance and reliability to ensure its drones function effectively in harsh conditions. It is also making strategic investments to enhance its capabilities in surveillance, expand its drone-as-a-service (DaaS) offerings, and develop middle-mile logistics solutions. These efforts aim to generate demand and drive adoption.
The company has also launched a beta version of FlightCloud, an automated workflow platform for civil drone applications. The aims to simplify drone data management and provide a unified solution to customers.
#2 DroneAcharya Aerial Innovations
DroneAcharya is an Indian drone company that specialises in drone-based solutions for industries such as agriculture, infrastructure, mining and surveying. It also offers tailored drone services. It has operations in India, the US, the Netherlands, Dubai and Thailand and is looking to further expand its footprint.
With a diverse portfolio of drone-based solutions, it is set to benefit from the increasing adoption of drones across sectors. The rising demand for drone technology in both commercial and defence markets aligns perfectly with its expertise in specialised solutions such as multi-sensor drone surveys, GIS data processing, and drone pilot training.
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On 24 May the company signed a memorandum of understanding with Airbots Aerospace Technologies to bolster their joint efforts in the drone industry, with a strong focus on the agricultural sector. On 7 February it announced an export order for defence FPV drones in collaboration with its associate company Drone Entry (Thailand).
The company is setting up a new manufacturing unit for agriculture and surveillance drones in Maharashtra. It has teamed up with Gridbot Technologies to combine drones, bots, and internet-of-things (IoT) solutions to serve the advanced needs of defence and industrial organisations.
It also joined forces with StudioTrika for drone-based immersive solutions to create drone-powered light shows and experiential concepts for events, product launches, customer experience and marketing. DroneAcharya also plans to set up a plant to manufacture agriculture, survey and surveillance drones in the next two years.
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Revenue jumped 94.9% to ₹37.3 crore in FY24 and net profit jumped 81.4% to ₹6.2 crore.
#3 Zen Technologies
Zen Technologiesmanufactures anti-drone systems that can detect, track, and neutralise threats by jamming drone communication. It also builds simulators for weapons and defence equipment.
As a leader in defence-related drone and counter-drone technologies, the company is well-positioned to capitalise on increasing demand for drone systems, particularly in national security where drones play a pivotal role. The surge in demand for counter-drone systems, and the shift from soft-kill to hard-kill solutions, aligns perfectly with Zen Technologies’s expertise.
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Revenue grew by 92% to ₹250 crore in Q1FY25 from ₹130 crore in Q1FY24, in line with expectations. Management sees significant potential in the air force and navy simulator markets, which are currently dominated by imports. They are collaborating with original equipment manufacturers to build such simulators.
Management is also exploring acquisitions in the electronic warfare and training/simulation sectors to enhance its offerings, emphasising the importance of maintaining synergy with acquired companies for smooth integration.
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The company targets revenue of ₹900 crore for FY25. Management expects an operating margin of around 35% and a net margin of 25%. Overall, management is optimistic about future growth, citing strong demand in core markets and a robust pipeline of orders.
#4 Paras Defence and Space Technologies
The company specialises in technologies needed for rockets and missiles, space research, naval systems, electronic warfare, drones and quantum communication, among other things.
It continues to indigenise drone manufacturing, developing diverse camera technologies for small drones and larger UAVs. Its investment in anti-drone solutions aligns with the increasing focus on security in the aerospace sector.
The establishment of a subsidiary focused on anti-drone devices, including jammers, demonstrates the company’s proactive approach to addressing security challenges posed by unauthorised drones.
The company’s portfolio includes high-altitude military-operation drones, logistic-support drones, attack drones, and tracking-and-detection drones.
Paras Aerospace Private Limited, its subsidiary, has been in the defence engineering industry for the past three decades.
Its drones are equipped with AI technology, allowing them to carry out tasks under various unpredictable conditions with little to no human supervision. The company’s partnerships with institutions such as IIT Bombay and collaborations with leading global companies such as Israel Aerospace Industries help enhance its technological prowess and competitive edge.
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Revenue increased by 24.2% to ₹79.67 crore in the March quarter while net profit jumped 63.8% to ₹96 crore.
With a substantial order book that’s projected to hit ₹2,500 crore by FY28 and 25-30% annual growth, Paras Defence is well-positioned to leverage the expected boom in the drone industry, making it a key player to watch in this rapidly evolving landscape.
#5 CE Infosystem (MapmyIndia)
The company offers a range of software services, including digital maps as a service (MaaS), software as a service (SaaS), platform as a service (PaaS), and IoT solutions tailored to automakers and other large corporations.
With a 95% market share of the in-dash navigation segment, MapmyIndia is also well-positioned to benefit from growth in the drone sector.
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The company recently invested about ₹7 crore to acquire a 20% stake in Indrones Solutions, which specialises in drone manufacturing and data analytics, to strengthen its foothold.
In 2024 MapmyIndia scored a significant win by securing a drone 3D mapping and risk monitoring contract with a major logistics company, and expects this to be a source of recurring business.
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Revenue grew by 13.5% to ₹100 crore in the June quarter while net profit rose 12% to ₹35.9 crore.
The company targets ₹1,000 crore bn of revenue over the next four to five years, with the drone business expected to play a substantial role in achieving this goal. MapmyIndia expects drone services to contribute around 5% of revenue by FY28.
The booming drone market presents a significant growth opportunity as MapmyIndia can leverage its existing mapping technologies and integrate them with drone systems. This strategic focus should allow it to capitalise on the increasing demand for innovative drone services in various industries.
Conclusion
The Indian drone industry is expanding rapidly. With the government aiming to position India as a global leader in drone manufacturing and associated services, the sector presents tremendous investment opportunities.
Recent media reports indicate the government plans to launch a scheme to provide drones to women in rural areas for agricultural use. Over the next three years, women’s self-help groups are expected to receive 15,000 drones and training to operate them.
Remember, though, it is crucial to conduct thorough research before making an investment decision. Also, ensure your investments align with your financial objectives and risk tolerance.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.
