The Indian military sector is expected to expand at a 20% compound annual growth rate (CAGR) between FY24 and FY29. This expansion is aided by strong government efforts and growing engagement from the business sector. According to CareEdge Ratings, the industry is likely to retain a PBILDT margin of about 20% throughout this time, showing its strong financial health and operational efficiency.
The Indian government has given significant resources for military, including ₹6.22 lakh crore for FY25. This money is critical for increasing the country’s military capabilities and reducing its dependency on imports.
Programs such as ‘Make in India’ are pushing attempts to increase domestic manufacturing of military equipment, reducing reliance on external sources. This transition is projected to increase India’s self-reliance in national security issues.
The expanding involvement of private enterprises in military manufacturing is critical. These organisations are expected to use their technology knowledge to improve and modernise India’s defence capabilities.
India’s defence exports have grown significantly, with an anticipated CAGR of almost 19% between FY24 and FY29. The government aims to achieve 50,000 crore in defence exports by 202829, in line with overall output targets.
Investment in developing technologies such as artificial intelligence and hypersonic weapons is likely to boost India’s defence capabilities, needing more spending for R&D.
Concern’s research of main DPSUs, New DPSUs, and Other PSUs/JVs, which account for about 85% of overall defence output, shows a constant rising trend in total operating income (TOI). Historical statistics show a CAGR of roughly 14% in TOI over the previous three years ending FY24, which is likely to improve in the medium term due to their solid order book. Profit Before Interest, Lease, Depreciation, and Tax (PBILDT) is expected to stay around 20% in FY25, highlighting these organisations’ strong profitability. It is anticipated that in
Overall, the Indian military sector is on a path to modernisation and self-sufficiency, with strategic plans in place to improve its worldwide standing and operational capabilities.
