Drone market in India has taken off in a big way, thanks to the government’s liberalized drone policy and boost for indigenous drone manufacturing. Use of drones is not restricted to defense sector, but has applications in sectors such as agriculture, tourism, and healthcare. Understandably, drone stocks have caught investors’ fancy as the industry’s prospects appear bright. Investing in the top drone companies could fetch good returns. Due to the growing number of use cases and the need for the products and technology, efficiency, utilization, and market potential, individual investors are currently making significant investments in some of the top drone stocks in India. Thus, it is important to know the trends and the factors that determine the industry’s growth to make an informed investment decision.
The drone industry in India: An overview
Drone manufacturing in the country has grown rapidly, thanks to the increase in the number of startups and innovations. Today, drones find applications in aerial surveillance, surveillance, monitoring, defense, filming, delivery, calamity response and many others, including civil and commercial applications. The Indian drone market is expected to fetch $27 million in revenue by 2024, growing at a compound annual growth rate (CAGR) of 5.96 % between 2024 and 2028.
The drone industry in India has received large investments from domestic and international investors. The Indian government has been providing a timely boost to this industry with meaningful investments. The key measures include the Digital Sky Platform being introduced to ease out the process of registration and operation permission for drones. Besides this, the policies regarding the operation of drones are framed by the Directorate General of Civil Aviation (DGCA).
Although the Indian drone industry had faced some hurdles initially, it has very good growth potential. If you wish to invest in drone stocks, you need to analyze these stocks, their background and their future road map. Focus on questions connected to the important regulatory initiatives of the segment, the capabilities of the segment’s growth, the time you are ready to commit to the investment, and your willingness to acknowledge risks. Seek professional advice, if required.
Top drone stocks in India in 2024 as per market capitalization
Some of the top drone companies in India are relatively new entrants in the market. So, they do not have a long history based on which investors can take a view to buy their shares. Due to their short history in the market, they also have little to no analyst following or ratings.
Being a niche segment, one of the parameters that can be used to estimate the strength of a drone company is the order book position. This provides visibility into the company’s future topline, bottom line, and cash flow.
We have listed some of the top drone stocks ranked by market capitalization.
| S.No. | Top Drone Stocks in India (as per Market Capitalization) |
| 1. | Bharat Electronics |
| 2. | Zen Technologies |
| 3. | Paras Defense and Space Technologies |
| 4. | ideaForge Technology |
| 5. | DCM Shriram |
Overview of the top drone stocks in India
Here is an overview of the top drone companies mentioned above.
Bharat Electronics Ltd (BEL)
Bharat Electronics Ltd (BEL), established in 1954, manufactures and supplies electronic equipment and systems for the defense and non-defense sectors. In November 2021, BEL inked a deal with US drone delivery firm Dronedek to manufacture smart drone delivery mailboxes. The Rs. 2.217 trillion market cap company offers state-of-the-art products and systems in various sectors, including radar and fire control systems, missile systems, communication and C4I systems, electronic warfare and avionics, naval systems and antisubmarine warfare systems, electro-optics, tank electronics and gun modernisation, and strategic components to the Indian defense market.
The stock traded at Rs. 306.30 as of Aug. 21, 2024.
Zen Technologies (ZENTEC)
Zen Technologies is one of the top 10 drone companies that deals with the manufacturing of defense drones. The company’s counter-drone technologies identify, monitor, and eliminate risks using disruption of the drone command. Weapons and defence equipment simulators are also offered by the firm which has a market capitalization of Rs. 14,271 crore.
Zen Technologies offers design, development, and manufacture of defense training systems. Applications and products provided by the company are driving simulators, live range equipment, and anti-drone systems.
The stock traded at Rs. 1,782.55 as of Aug. 21, 2024.
Paras Defence and Space Technologies Limited (PARAS)
Paras Defence and Space Technologies is a defense and space technologies firm incorporated with four decades of experience. The company which has a market cap of Rs. 4,836.01 crores, operates in two verticals: Optics & Optronic Systems, and Defence Engineering. It also has significant business operations in drones, including anti-drone equipment, primarily through Paras Anti-Drone Solutions.
The stock traded at Rs. 1,235 as of Aug. 21, 2024.
ideaForge Technology (IDEAFORGE)
The leading drone drone manufacturer produces unmanned aerial vehicles (UAVs). The company has a market cap of Rs. 3,010 crore, as of Aug. 20, 2024. It develops and manufactures these UAVs at its own in-house product development centre. The UAVs manufactured by the company are used in the commercial as well as military markets.
The stock traded at Rs. 696.50 as of Aug. 21, 2024.
DCM Shriram Industries (DCMSRIND)
The diversified business group, a relatively new entrant in the drone manufacturing sector, is already making waves. The company, which has a market cap of Rs. 1,707 crore as of Aug. 17, 2024, is focused on manufacturing versatile drones that also cater to sectors outside the defense segment. In 2021, DCM Shriram purchased a 30 percent stake in Turkish drone firm Zyrone Dynamics.
The stock traded at Rs. 204 as of Aug. 21, 2024.
Regulatory environment
The drone industry in India developed in the recent years. The Drone Rules 2021 heralded a new beginning by providing standardized ways of drone operations and loosening the regulatory requirements on drone manufacturers and users. To promote domestic production, the government also launched the Production Linked Incentive (PLI) scheme for drones, further boosting the growth of the sector.
Partnerships and acquisitions
Strategic alliances and acquisitions have been instrumental in driving the drone market in India. The market is witnessing competitive cooperation such as strategic partnerships, whereby market leaders combine resources to cover the competitor’s gaps. For instance, large systems integrators are partnering with global drone technology solution providers to deliver advanced solutions across the Indian drone sector. These collaborations help Indian drone manufacturers acquire new technology and knowledge and boost growth.
Demand and market potential
The demand for drones in India is on the rise, and UAVs can be used in so many ways in different sectors. Currently, drones are used in farming for the surveillance of crops, for the application of fungicides and chemicals, and for enhanced production. The next important segment that the industry owes its growth to is the defense industry where drones are used for surveillance, reconnaissance as well as combat operations.
Technology and innovation
The use of technology and innovation is seen as the driving force behind the drone industry in India. Firms are now pumping large amounts toward research and development to ensure that the drones developed are more effective and efficient and are able to carry out more delicate tasks. AI, machine learning, and IoT are embedded with drones for applications, particularly in agriculture, delivery, and real-time data processing. Advancements that can be observed within the drone hardware like the drone’s battery life, the capacity to carry loads, and better navigational systems are also acting as growth engines of the industry.
Valuation
Investor interest in the top drone companies in India has been on the rise as demonstrated by the rising valuations. With the growth of demand for drones in different industries, industrial companies have a growing turnover and the value of their shares has grown by leaps and bounds. Market specialists are increasingly looking for long-term strategies to invest in the drone sector and hence are willing to pay a premium for firms that are seen as early movers and key innovators. Other growth drivers include government support and business-friendly laws and policies.
Should you invest in drone stocks?
Buying drone stocks in India is an attractive investment prospect, thanks to the growth of the industry. The drone industry is rapidly advancing across verticals and supported by government policies. Nonetheless, like any other developing industry, there are challenges such as regulation, technology, and competition.
Investors would do well to research and analyze the firms’ standing in the market, innovations, and financial strength. Another hedge that can be adopted is the diversification of investment to other segments of the drone business. High returns might appear attractive, but one should approach investing in the listed drone stocks carefully and with a long-term vision.
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Conclusion
Overall, long-term-oriented investors are likely to find significant buying opportunities in the fast-growing drone industry. Companies with robust fundamentals and competitive advantages are likely to provide attractive investment returns. Innovative and top drone companies that explore varying use cases for drones can open up new markets and disrupt traditional industries, generating wealth for shareholders.
