Which Companies Manufacture Military Drones in India?

The armed conflicts in Israel-Palestine, the Caucasus Mountains, the Red Sea, and most recently, Ukraine, have served as a brutal testing ground for a very quickly changing method of warfare.

And drones are playing a key role.

Cheap drones are proving to be cost-effective game changers, outperforming even the most advanced legacy systems.

This shift signifies a crucial turning point in defence strategy, where innovative drone companies that can counter drones in a cost-efficient manner are poised to become the new defence giants of tomorrow.

India, with its vast borders and ever-evolving security threats, is experiencing a remarkable surge in its military drone manufacturing sector.

Let's delve into the top military drone manufacturing companies in India.

#1 Solar Industries

Leading the list is Solar Industries.

Solar Industries is a leading manufacturer of bulk explosives, packaged explosives and initiating systems.

Its products find use in mining, infrastructure, and construction industries.

The company has 34 manufacturing plants in India and six abroad, with a capacity to produce over 450,000 metric tonnes (MT). Apart from a strong domestic presence, it sells its products in over 51 nations.

It ventured into defence and is manufacturing propellants for missiles, rockers, and warhead explosives.

The Indian Army has inducted indigenous loiter munition, Nagastra-1, developed by Nagpur-baser Solar Industries.

Nagastra-1, operating in a "kamikaze mode," boasts the capability to neutralise hostile threats with GPS-enabled precision strikes, exhibiting an impressive accuracy of 2 meters.

Economics Explosives Ltd (EEL), a subsidiary of Solar Industries, in collaboration with Z-Motion Autonomous Systems Pvt Ltd, Bangalore, has spearheaded the development of Nagastra-1, the country's first indigenous suicide drone.

The Nagastra-1 is a man-portable weaponised drone system designed to neutralise enemy threats with high precision.

The induction of Nagastra-1 marks a critical step towards India's self-sufficiency in drone technology for military applications.

Further, the Indian Army has placed an order with EEL for the supply of 480 loiter munitions under an emergency purchase agreement, signalling the readiness of indigenous defence capabilities.

EEL delivered an initial batch of 120 loiter munitions to the ammunition depot at Pulgaon, affirming the readiness of the system for deployment.

Going forward, the company plans to advance these drone systems.

For more details, see the Solar Industries company fact sheet and quarterly results.

#2 HAL

Next on the list stands Hindustan Aeronautics Limited (HAL).

Hindustan Aeronautics Ltd (HAL) is an aerospace and defence company owned by the government of India.

The company develops, designs, manufactures, and supplies aircraft, helicopters, avionics, and communications equipment for military and civil markets.

Due to its state-owned status and established reputation in national air security, the company is a pioneer in India's drone technology advancement.

HAL is a leading manufacturer of complete military drones for the Indian armed forces.

They possess expertise in designing and developing crucial drone components like airframes, propulsion systems, and other hardware essential for military applications.

It is actively engaged in developing various drones, primarily to fulfil defence needs, and is also transforming the Kiran aircraft series into unmanned aerial vehicles.

In April 2024, HAL initiated the assembly of the much-anticipated RUAV-200 drone, designed for high-altitude logistical operations, marking a significant step forward after a two-year delay.

Additionally, through its subsidiary, Naini Aerospace Limited, HAL aims to establish itself as a centre of excellence for manufacturing and MRO activities in the aerospace and drone industry.

Moving forward, HAL is expected to benefit significantly from the Indian government's initiative to foster indigenous drone technology.

For more details, see the Hindustan Aero. company fact sheet and quarterly results.

#3 IdeaForge Technology

Next on the list is IdeaForge Technology.

IdeaForge is a global leader in drone technology, creating and producing unmanned aerial vehicle (UAV) systems for security and surveillance purposes.

IdeaForge dominates the Indian UAV market with a 50% market share, serving the civil and defence sectors.

As a leader in the Indian UAV market, 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 2024, it won a Rs 480 m contract with the Indian Army for counter-drone technology.

The company has joined hands with Garuda Aerospace, another leading drone maker, to work together on product development and manufacturing, aiming to benefit from their combined skills and resources.

In November 2023, IdeaForge teamed up with Skylark Drones, a top drone delivery service provider, for joint operations in India.

It also made history by completing India's first beyond visual line of sight (BVLOS) drone flight with its NETRA v4 drone. This marks a breakthrough for drone operations in India, opening up new possibilities for long-distance deliveries and surveillance.

Going forward, the company plans to focus on performance and reliability, ensuring their drones function effectively in harsh conditions.

For more details, see the Ideaforge Technology company fact sheet and quarterly results.

#4 L&T

Next of the list stands defence giant L&T.

In 2024, Larsen & Toubro unveiled plans to develop a solar-powered high-altitude platform (HAP) drone capable of staying airborne for up to 12 months.

This marks a significant step bolstering L&T's position in the drone market.

Targeting defence, telecommunications, and environmental monitoring, this HAP drone promises persistent surveillance and communication capabilities, including providing low-cost mass internet access to remote areas with a 10 Gbps base station.

With solar panels and a lightweight design, it offer cost savings and environmental sustainability.

L&T and IdeaForge will offer drones and allied systems for defence use.

This joint venture aims to provide high-tech, integrated drone solutions to enhance security and surveillance. Additionally, it plans to offer anti-drone solutions to counter the threat of malicious or unintended drone usage.

Apart from this, L&T, over the years, forayed into multiple business verticals, including infrastructure, power, hydrocarbon, metal and minerals, defence, aerospace, information technology (IT), products, systems and equipment, finance, and real estate.

Going forward, with its emphasis on solar power, the company might develop a lightweight and efficient drone platform.

For more details, see the L&T company fact sheet and quarterly results.

#5 RattanIndia Enterprises

Next on the list is RattanIndia Enterprises.

RattanIndia Enterprises Limited, the leading entity of the RattanIndia group's modern growth ventures, is a prominent drone player.

In September 2021, the company unveiled its drone venture in collaboration with its wholly-owned subsidiary, NeoSky India Ltd.

NeoSky India is poised to pioneer an innovative drone system platform, concentrating on industry-specific applications within India.

The company introduced its inaugural anti-drone product, 'Defender,' in September of the preceding year, facilitated by its subsidiary Throttle Aerospace, where NeoSky acquired a controlling interest of 60%.

Throttle Aerospace Systems is India's first DGCA-approved drone maker for civil drones and is licensed to manufacture military-grade drones from the Ministry of Defence.

The company is implementing a multi-faceted sales strategy, including direct sales, partnerships, and online platforms, to increase market reach and product visibility.

For more details, see the Rattanindia Enterprises company fact sheet and quarterly results.

#6 Paras defence & Space Technologies

Next on the list is Paras Defence & Technologies.

Paras Defence and Space Technologies specialises in technologies needed for rockets and missiles, space research, naval systems, electronic warfare, drones, and quantum communication, among others.

Paras Defence is indigenising the manufacturing of drones, including making different types of cameras for small drones, and larger UAVs, while scaling up its offerings for the civilian sector.

But even as it scales up its drone offerings, the company has also set up a subsidiary that is readying anti-drone devices such as jammers to protect hostile and spurious drones.

Paras Aerospace Private Limited, a subsidiary of Paras Defence and Space Technologies has been in defence engineering for the past three decades.

The company's portfolio includes high-altitude military-operation drones, logistic-support drones, attack drones, and tracking-and-detection drones.

All these UAVs are equipped with AI technology, machinery and algorithms that can solve problems requiring human-like perception, cognition, planning, learning, communication, or physical action and carry out tasks under various unpredictable conditions with little to no human supervision.

Paras Defence partners with leading academic institutions like IIT Bombay and reputed organisations like DRDO, to access the best research talent and accelerate innovation.

It also collaborates with global giants like Israel Aerospace Industries, to gain access to advanced technologies and explore joint ventures, enhancing its global competitiveness.

For more details, see the Paras Defence & Space Tech company fact sheet and quarterly results.

#7 DCM Shriram

Last on the list is DCM Shriram.

In August 2021, Indian firm DCM Shriram Industries revealed its acquisition of a 30% stake in a Turkish drone manufacturer, Zyrone Dynamics.

Further, in 2023, the company formed a joint venture with Israel's Skylock Systems.

This venture focuses on manufacturing Israeli-designed counter-drone systems under the name, DCM portable counter-unmanned aircraft system (CUAS).

These CUAS are designed to detect, track, and neutralise unauthorised drones that could pose a threat to national security or critical infrastructure.

DCM Shriram is currently conducting field testing of their counter-drone systems with the Indian Border Security Force (BSF). This suggests they are in the development or initial deployment phase.

Going forward, the company further plans to deepen its foothold in the defence drone market.

For more details, see the DCM Shriram company fact sheet and quarterly results.

Conclusion

Investing in military drone stocks in India presents a compelling opportunity for several reasons.

First, the market segment within India is anticipated to experience a steady annual growth rate of 5.78% (CAGR) from 2024 to 2029.

This consistent growth indicates a robust and expanding sector, driven by increasing defence expenditures, advancements in drone technology, and a growing emphasis on enhancing military capabilities.

Furthermore, the global military drone market is poised for significant expansion, projected to grow from US$ 14.1 billion (bn) in 2023 to an impressive US$ 35.6 bn by 2030.

This substantial increase, at a CAGR of 14.1%, highlights the escalating demand for military drones worldwide.

As countries prioritise modernising their defence systems and enhancing national security, military drones are expected to play a pivotal role.

India's focus on self-reliance in defence manufacturing, supported by government initiatives and policies, further bolsters the potential for growth in this market.

However, the primary buyers in this market are governments, and any reduction in defence spending or delays in contract awards can adversely affect the revenue and growth prospects of companies in this sector.

It's crucial to conduct thorough research before making any investment decisions. Ensure that your investments align with your financial objectives and risk tolerance levels.

Further, you can now filter the best drone stocks in India using Equitymaster's powerful stock screener.

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