Welcome to Investor’s Edge, your daily window into the world of business and investing. Here, we cut through the noise to deliver insights that matter from shifts in global markets to the subtle moves of niche players.
Our focus is on clarity and depth: we not only highlight what’s happening, but also why it matters. Whether it’s a bold strategy from an industry leader, a new growth pocket in an emerging sector, or a quiet trend with outsized potential, you’ll find it distilled here in an actionable, thought-provoking way.
Welcome to the 23nd edition of Investor's Edge!
This issue dives into the Q1FY26 results and concalls of leading Aerospace & Defence companies. We will unpack the highlights of their quarterly performance, examine the drivers fueling their growth, and outline the key triggers that could shape the sector’s trajectory in the coming quarters
One of the most exciting shifts we’re seeing in India’s defence space is the genuine rise of indigenisation. At the same time, exports are picking up pace with a goal to make it larger than never before . And if there’s one theme that keeps coming up in every conversation it’s the growing importance of radar, electronic warfare, and anti-drone systems. These aren’t niche add-ons anymore; they’re becoming the very core of modern battlefield readiness. For investors, that means a sector with long runways of growth, where both the tried-and-tested PSUs and new-age private players have a meaningful role to play
Bharat electronics says : The emergency procurement, overall, the activities started, as last time told. We have received one or two orders already as part of emergency procurement. I think it was when we had given our public statement, there we had also written some of the items, like, one LLLR radar we received, and one more item, I think. So, we have started getting emergency procurement-related orders also. As it was told the last time, I think September is the cut-off as of now for them. So, by next two months, we are expecting many more orders. But overall, all these orders, let me assure you, they will be part of our INR27,000 plus crores of order book, which we wanted to get in this total financial year. We have already received more than INR10,000 crores. So, remaining INR17,000 plus crores, definitely the EP will help us in crossing that target.
Zen tech says - “And it is not that they have exhausted all the funds. We expect that orders will continue in Q2, even Q3, the orders will continue. And typically, they have to close the placing orders by March of the year. If they have placed, they have placed for very few emergency procurement till now but the real emergency procurement has to go in a big way which will be starting in the next few weeks..”
Astra microwave management - “The government of India has taken several progressive steps in recent years to strengthen the domestic defense manufacturing ecosystem, including liberalizing foreign direct investment limits, promoting indigenous design and development, introducing the defense testing infrastructure screen and giving priority to domestic procurement. These initiatives reflect a clear and determined commitment to build a self-reliant globally competitive defense industrial base. The results of these efforts are already visible. The increase in India's defense budget clearly demonstrates government intent to rapidly build a national capability. This policy direction has also opened new opportunities for private sector players, enabling us to set up investments, scale up innovation and participate more meaningfully in critical national programs.”
Zen tech management - “Because the Government of India is very, very serious. If somebody gets foreign technology or some pretended technology and tries to sneakily qualify it as indigenous, the government will really, really go after them. And in 2023 also during the pre-meeting a lot of people asked, how are you going to verify that the technology is IDDM, indigenously designed, developed, and manufactured? So the officers there were very, very clear. Listen, we are going to go through your software code. And you have to explain each major block in that. We may dig deep wherever we want. Then you compile in front of us the whole software. And then you will run the anti-drone system in front of us. And the electronic, all the PCBs, designs, the Gerber files, everything will be taken. And we also want a GitHub, the version control system that you have in place. When was it started? What are the different versions? Similarly for mechanical engineering, CAD drawings, exploded solid works, used simulations, which we have done. So I think with all these strict checks in place, Zen has a very, very good chance of getting substantial anti-drone system orders.”
Astra microwave to introduce 3 new radar systems this year Management says : On the totally 100% Astra radars, I'm laying much hope on the promise of our R&D team that they will deliver at least 3 new radars this year, which have a massive market, both globally as well as within India over the next 12 months. That is the delivery timeline. So this adds to our product portfolio significantly as 100% Astra products, right from the PCBs to the software to the RDP to the software, which integrates at all, everything will be through our own supply chain, which we shall create for our own products.
Mro as an Industry opportunity is really big
Rossell Techsys : No, I think, I mean, if you look at aerospace and defense globally, I think there's a huge opportunity not only for yourself, but for other customers as well. The aerospace and defense spend for most countries is going up significantly. India is very well positioned to capture a lot of that business. So that's definitely the idea that we're looking at MRO and services and different capabilities moving forward to better profitability moving forward.
Order inflow guidance for the rest of the year
Astra microwave : We have given guidance of around INR1,300 crores to INR1,400 crores, out of which we have booked as on date, that is up to now, we have booked around INR260 crores, including INR137 crores of Q1 plus additional order what we booked is in July, as I mentioned, about INR115 crores plus another INR20 crores, INR30 crores. So total, we have, I think, booked around INR260 crores as on date in this financial year. And we are quite confident to book another INR1,100 crores or so by March '26.
Development around AI / ML use cases in warfare collaborating with other defence , startup companies
Bharat electronics says : We have created an AI incubation centre for Navy and Army at BEL, so that we, users and startups, all can work together and develop this technology -- this cutting-edge technology well in time. So, we have done good investment, we have done a good infrastructure and good framework for these technologies to be developed for modern warfare. As you may be knowing, all major C4I programs, which we have used even in the recent option tool also, were primarily from BEL, with support from DRDO as the initial technology provider, but now it is mainly spearheaded by BEL. A lot of AI/ML components were there in these systems, but many more are planned now as a value addition for these C4I programs based on AI/ML technology. So, we are confident we can do jointly with our startup ecosystem, we can do jointly with our defense users in place, closely working with them. We can give these cutting-edge technological solutions related to modern warfare without any support from foreign countries. That much I can assure you
Bharat electronics says : So, regarding export, we are having a consistent performance of almost 20% year-on-year growth on the export front. And we are confident that over the period of next five years, we will try to reach around 10% of our turnover through exports. Right now, it is around 4% to 5%. So, we are constantly putting effort as the overall company is growing at roughly 15% to 16%. But export, our internal target is more than 20%. So, over a period of time, the export share to the overall turnover will steadily increase. And we wanted to reach in the next five years around 10% of our turnover through exports. So, that is our vision about exports. We are going in the right direction with a reasonably good speed, I should say, on the export front.
Good tractions in exports business post operation sindoor , especially towards C41 solutions LCA Mk1A by HAL creating value proposition across various defence companies
Astra microwave management says : “ I think DRDO is very confident that this particular radar can be inducted in the LCA Mk1A. So we are hoping to see that particular time. So we cannot tell exactly how -- when this can be inducted and what is the quantity and all, so only time can tell. Maybe in next 3 to 4 months, I think we'll be in a position to inform you exactly on the Uttam”
Long range surface to air missile big contributor of orderbook
Orderbook breakdown of Bharat electronics : So, as of today, as on 1st of July, technically, the major order book, largest is LRSAM program, which you may be knowing, we received one order also -- this year also out of that. So, around INR5,000 plus crores is the LRSAM program. Fuse is around INR4,500 plus crores. Akash Army is the third one, which you may be knowing, Akash Prime trial successfully, it was done recently, nearly, which came in the media also. So, that is around INR3,000 crores. BMP upgrade around INR3,000 crores. Ashwini, Arudhra radar around INR2,500 crores, Shakti around INR2,000 crores -- Shakti EW system around INR2,000 crores. So, like that is their top 10, 12 programs themselves consisting of around INR35,000 crores to INR40,000 crores order book for us.
Orderbook for axiscades : Currently, we have order book and forecast visibility of about Rs.540 crores in defense and about Rs.210 crores in ESAI and Rs.450 crores in aerospace approximately, which should add up and defense alone is about Rs.540 crores. This also comprises OEM activities as well as three groups actually DRDO, PSU which is some of the programs we are talking about MOD, which includes all the anti-drone and those kinds of systems and then the OEM engagements like MBDA, Indra, etc.
Lesser topline growth in Q1 was attributed by Global conflicts leading to poor supply chain - Bel
Management says :” Some of the critical components from Israel could not come. And because of that, we could not achieve, otherwise our target was at least 10% plus in the first quarter itself.”
Astra management says - “I think the very paradigm of warfare has changed and drones are now at the forefront, okay? So as we speak, probably every army in the world is trying to figure out how to incorporate drones as a key part of their warfare and as a corollary, how to incorporate anti-drone systems, both on the civilian side as well as on the military side to prevent drones from causing havoc. So we expect -- there are multiple reports I have seen in terms of estimates of the total potential business. But probably this is one of the massive -- and they're all over there in terms of numbers, right? But it is probably one of the most critical developments in the field of military, which has happened over the years.”
Drones are our priority, says Bel management - “One of the leads anyway is the Archer UAV for which some trials and other evolutions are going on and immediately completing that. We are expecting a big order on Archer UAV. But in addition, there is loitering ammunition, there is a logistic drone, and there is a male variety of drone requirement which has come. We are pursuing these three, four more opportunities for drones. Male and Archer are definitely big leads for us. So we are confident by year-end at least one of the orders we may get out of these four or five leads before this. And the next 2 to 3 years, definitely some big orders we will expect from that. But presently, I don't have a quantified figure about that because these all are in different stages of evolution only. They have not come to a contract finalization stage where I can clearly give you some numbers. But definitely drone and drone warfare and anti-drone, these are the areas of importance for BEL. We are committed for this particular segment because we know we can give very good solutions to our defense forces in this segment.”
Some of the drones have become commoditized focus lies in bringing down those cheap drones with critical anti drones system
Zen tech’s management - Again, just to go back a little in time, we looked at the field in 2018. We wanted to get into drones but we saw there were so many players there. And we thought, listen, I think this is a winner's curse. Even if you win, you will never make money in drones. And we moved to anti-drone systems. And there again, nobody was working on that.
Astra microwave management - “ So we decided instead of drones, which have a full range, right, from -- some of them are commoditized, some of them are highly specialized. We would focus on anti-drone systems, which are capable of taking down the cheap commercially available drones, which come in regular frequencies to drones which come on nonstandard frequencies. And I must tell you that we are one of the few companies that have the capability to create jamming solutions in nonstandard frequencies over a long range, short range, there is a fair amount of competition. But I think the winners will be distinguished between the range and where you can accomplish, what bands you can block, etcetera, etcetera. So it's massive. We don't know who will get what kind of orders, okay? I think the fact that in 6 months, we have participated in more than 3 dozen RFIs itself speaks volumes about the kind of potential which exists not only here but globally also. “
Anti drones has emerged out as a much critical defence equipment in the era of evolving drone tech
Zen tech management says - “ But again, in the case of anti-drone systems, we understand that it is a very, very evolving field. And as we speak, the government is making changes to the specs, because now they have been proven in war and the kind of threats they actually happen and the ability of the country to have this technology in house, because everything that is happening is evolving. Earlier, we used to think soft kill is enough, because all the drones are controlled from ground to the drone, there is always a control going on. And then we did the soft jamming where you can block the frequencies by using jammers but then the drone guys came up with another thing called an autonomous drone that could go just by the GPS. They do not need any ground control. They would be pre-programmed with the destination, and they could go. And then we came up with spoofers, where we can spoof when the drone is in India. We can spoof that it is in some other country, maybe in China or something like that and it would get lost. And then to come out of the spoofing, they came up with AIbased technology, like vision-based technology with waypoints, etc. And now we are actually saying that to ensure that the waypoint is eliminated, we have to use hard kill techniques, like shooting it down, using various weapon systems, etc.
Sub systems for missiles to be jointly developed by BEL , Astra , Bharat dynamics , DRDO
Astra Microwave’s management - “ It's in the development stage. In all probability, I think in the next couple of years, we should -- DRDO, BEL and BDL should be in a position to complete that proto maybe in the next couple of years. But this is in a development stage as of now. I cannot comment exactly on timelines because we are not the prime party to execute the system order. We are only supplying subsystems to that program. “
Virupaksha radar systems with mainly AAAU major subsystem bid won by two companies Bel & Astra microwave : Astra microwave management - Yes. Actually, if you look at the Virupaksha radar, there are many subsystems there, like one is the AAAU that is Active Antenna Array Unit. This is a tile version, which, as I mentioned, we and BEL have received the contract in a competitive tender. Apart from that, we are also developing the AAAU in plank version based on the Uttam technology. In fact, both are going in parallel. So they are trying to explore whichever technology gets into that, so that will be produced. So we are there into both versions. Apart from that, of course, there are other subsystems like in EW -- sorry, yes, EW suit and then other components. Few components like multichannel exciter receiver, which other companies have won. But we are going to bid for some more subsystems, which is like RPU and there are a few other subsystems there. So like there are many subsystems, but AAAU is a major subsystem, which is almost like, I would say, 55% to 65% of the entire radar
Using the synergies of defence with private aerospace and diversifying client base
Rossel tech says : “We have a very good reputation in the aerospace and defense industry. And that's why I have to say today we have over 30 customers. We're dealing with the best of the best in different geographies of the world today and our reputation speaks for itself. And there are companies approaching us to do work for them. Boeing was the start to create that image of the company and we've been able to consistently deliver high-quality components at the right price and on time. And that's what resonated with the other companies. They like yourself for the quality of components that we're able to deliver. And that's why today I'm happy to say we have over 30 customers and we're going to be seeing exponential growth with all the new customers that we've onboarded in the last three years, similar to the likes of Boeing moving forward. “
The defence sector’s momentum is no longer a promise, it's a trend taking shape in real time. With indigenisation gaining teeth, exports accelerating, and critical technologies like radars and anti-drone systems moving centerstage, the opportunity set for investors is widening. The challenge now is not if the sector will grow, but which players will consistently capture this growth. That’s the edge we’ll keep tracking for you. Stay tuned for upcoming editions of Investor’s edge.
Disclaimer: This blog post is for informational purposes only and does not constitute a recommendation to buy or sell any securities. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.
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