India’s defence industry is getting into a brand new section. The main target is not restricted to lowering import dependence. India no longer solely builds but in addition designs, manufactures and exports full defence techniques. The dimensions of this shift is seen within the newest numbers.
The ₹1.78 Lakh Crore Macro Shift
Defence production reached ₹1.78 lakh crore in FY26, up 15.6% from ₹1.54 lakh crore a 12 months earlier. Defence exports grew even quicker, and surged 62.7% to ₹38,424 crore. The non-public sector additionally elevated its contribution to 24% of whole defence manufacturing.
A number of components are driving this enlargement. India has steadily elevated defence spending whereas pushing the armed forces in the direction of higher home sourcing. The Optimistic Indigenisation Lists, the SRIJAN portal, Improvements for Defence Excellence, and defence corridors are serving to shift extra manufacturing and procurement towards Indian firms.
Practically 65% of defence equipment is now produced domestically, in contrast with 65-70% import dependence earlier. The chance can also be increasing past the home market. Indian defence merchandise at the moment are being exported to greater than 80 international locations.
Now, the chance will not be restricted to firms that manufacture full weapon techniques. Rocket and ammunition techniques have gotten extra related now, given their increasing position in warfare. For India, constructing these capabilities domestically is a key and strategic requirement.
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That is the place the Pinaka programme turns into attention-grabbing
Developed by DRDO, the Pinaka Multi Barrel Rocket Launcher has advanced from an indigenous artillery system right into a broader household of rocket techniques. The programme is now shifting in the direction of longer-range and guided variants. The newest improvement got here on July 8, 2026, when DRDO successfully tested the Pinaka Long Range Guided Rocket at a spread of 60 km.
The launch was profitable, hitting the goal precisely. Considerably, the check used the prevailing Pinaka launcher, permitting totally different rocket variants to function from a single platform. The check adopted the successful flight test of the 120-km Pinaka Long Range Guided Rocket in December 2025.
The programme can also be gaining worldwide recognition. India has already begun exporting Pinaka techniques, with Armenia becoming an important overseas customer. This provides an export alternative to an already rising home requirement.
For Dalal Avenue, the Pinaka story is greater. It sits on the intersection of rising defence spending, growing indigenisation and India’s rising defence export ambitions. Towards this backdrop, check out these two listed explosive gamers which can be additionally concerned within the worth chain.
#1 Photo voltaic Industries: Pinaka’s Rocket Powerhouse
Solar Industries has shifted from a producer of commercial explosives to a fast-growing defence participant. The defence vertical is Photo voltaic’s highest-margin enterprise and its progress engine. The share of defence enterprise within the income combine elevated to 26% in Q1FY27 from 19% in the identical quarter final 12 months.
Decoding the Q1FY27 Surge: Explosives vs Defence
Income from the defence enterprise surged 123% year-over-year to ₹933 crore, whereas income from all different companies, together with home and worldwide explosives, elevated 57.5% to ₹2,735 crore. Income elevated 70.3% to ₹3,668 crore. EBITDA rose 82% to ₹1,024 crore, whereas margins stood at 27.9%. Web revenue grew by 89% to ₹666 crore.
Progress is pushed by the scale-up of worldwide subsidiaries, entry into new geographies, and common realisation charges rising by greater than 30%. This enhance is pushed by commodity inflation and surging international demand for high-energy supplies and ammunition replenishment.
Contained in the ₹21,400 Crore Order E book and FY27 Targets
The corporate estimates its total top-line for FY27 to extend from ₹9,838 crore to ₹14,000 crore. Defence income is anticipated to extend to ₹4,500 crore. If these targets are met, defence will symbolize 32.1% of Photo voltaic’s income for FY27, up from 26% in Q1FY27 and 19% in Q1FY26.
This defence backlog presently exceeds INR 18,000 crore, representing the vast majority of the corporate’s whole order e-book of INR 21,400 crore. This offers high-quality income visibility for over two years. The Pinaka rocket system is a key element of Photo voltaic’s quickly rising defence phase and ₹4,500 crore defence income in FY27.
The Pinaka Program: R&D, Validation, and Export Potential
Notably, Photo voltaic is actively concerned in creating, integrating, and manufacturing superior Pinaka rocket techniques. It has undertaken its personal in depth analysis, improvement, and testing to design and scale particular superior variants. This consists of the Pinaka Enhanced Vary System, Guided Prolonged Vary, Propellants and Integration.
Photo voltaic’s analysis and improvement for the Pinaka Enhanced Vary System lasted eight years. Photo voltaic then examined them with roughly 100 rockets for operational validation. This made it the primary Indian firm to efficiently test-fire the Pinaka a number of rocket launcher system.
Photo voltaic can also be the primary private-sector firm in India to dispatch the Pinaka Enhanced Mk-I rocket system to the Indian Military. It additionally secured a ₹6,084 crore contract from the Ministry of Defence to provide Pinaka Enhanced Vary rockets and Space Denial Munitions. A request for citation has been issued for the Guided Pinaka Rocket System.
That is a complicated, high-value product that ensures a long-term income pipeline for the corporate within the coming years. Moreover, the corporate has entered the worldwide market, exporting its first batch of guided Pinaka rockets to Armenia.
#2 Apollo Micro Programs: The Electronics Behind Pinaka
Apollo Micro Systems has a various presence in defence know-how. It’s now absolutely built-in, spanning electronics design, manufacturing, weapon integration, and defence explosives. The corporate has a number of counter-drone and Anti-Drone Programs. It has accomplished trials for 9 variants of aerial drop bombs, which have just lately acquired acceptance from the forces.
In July 2026, the Indian Air Drive awarded the corporate a Make-II prototype sanction order for a 500 kg Sensible Bomb. The corporate has been constructing its personal inside capabilities for unmanned aerial autos (UAVs). Apollo Micro Programs is actively in discussions to tie up with home and worldwide companions that possess mature UAV platform applied sciences.
Decoding the Q1FY27 Surge: Why File Revenues Masked a Margin Drop
Apollo Micro Programs delivered its best-ever quarter efficiency in Q1FY27. Income grew by 88.1% year-on-year to ₹251.3 crore. EBITDA surged by 31.3% to ₹53.7 crore whereas margins compressed 920 bps to 21.4%. Regardless of that, internet revenue surged by 42.6% to ₹25.2 crore. The consolidation of the just lately acquired low-margin bulk explosives enterprise, Excellent Explosives, dragged margins.
Excellent Explosives was a loss-making entity on the time of acquisition. It’s presently present process post-acquisition operational restructuring. Administration expects it’ll take 3 to 4 quarters to totally optimise overheads and operations and attain its focused profitability stage. This can be true as Apollo’s standalone margin expanded 331 bps to 17.9%.
Contained in the ₹1,704 Crore Order E book and the 12x Capability Enlargement
The corporate’s consolidated order e-book stood at ₹1,704 crore, which included ₹480 crore from Excellent Explosives. The corporate expects to obtain a single order value ₹2,500 to ₹3,000 crore by the top of FY27. If profitable, this might raise the group order e-book to ₹3,500 to ₹4,000+ crore.
Administration has maintained a continued income progress steering of 40% to 45%. To realize the focused progress, Apollo Micro Programs is scaling its operational capability by 12x. The power is anticipated to be absolutely prepared by March 2027.
As soon as accomplished, Apollo Micro Programs will start mass manufacturing and can quickly obtain large-scale export orders, which it’s presently fulfilling slowly attributable to capability constraints. To additional deepen its involvement, the corporate signed an settlement to purchase a 41.3% stake in Premier Explosives from the promoters. This acquisition will enable Apollo Micro Programs to fabricate all weapons in-house.
The Execution Pipeline: Monetising QRSAM, Akash-NG, and Pinaka Packages
For Apollo Micro Programs, a number of matured proprietary applied sciences are getting into the majority manufacturing section. Whereas bidding/negotiation is full, execution and income recognition will begin in FY28. The Multi-Influence Ground Mines are transitioning into manufacturing. Administration expects to safe 70% of the contract worth (₹3,500 crore) attributable to improvement cum product associate.
The Ministry of Defence is putting a phase-1 order for 1,000 Fast Response Floor-to-Air Missiles (QRSAMs). The element worth for Apollo Micro Programs is greater than ₹1 crore per QRSAM missile. This interprets to an addressable pipeline of ₹1,000+ crore.
The 1,000 Pinaka Rocket Catalyst
The Ministry of Defence has authorised 1,000 Akash-NG missiles. Apollo Micro Programs element worth is ₹1+ crore per missile. The Indian Military has accomplished negotiations for the two,000-unit Pinaka rocket program. Apollo Micro Programs element could possibly be value ₹85 lakh per rocket, translating to a possibility of ₹1,700 crore.
For the Pinaka Rocket, the corporate designs, develops, and manufactures the important onboard electronics and subsystems. This consists of each the usual artillery rocket and its guided variant (Guided Pinaka). It expects to obtain these orders in the course of the present fiscal 12 months, including a considerable pipeline to its order e-book.
Evaluating the Q1FY27 Financials of Each Corporations
| Particulars | Photo voltaic Industries | Apollo Micro Programs |
| Q1FY27 Income | ₹3,668 crore | ₹251.3 crore |
| Income Progress YoY | 70.3% | 88.1% |
| Q1FY27 EBITDA | ₹1,024 crore | ₹53.7 crore |
| EBITDA Progress YoY | 82% | 31.3% |
| Web Revenue | 666 | ₹25.2 |
| Web Revenue Progress YoY | 89% | 42.6% |
| Order E book | ₹21,400 crore | 1,704 crore |
| Supply: Investor Shows | ||
Photo voltaic Industries has a considerable lead in income, profitability and order-book power, whereas Apollo Micro Programs is rising from a a lot smaller base.
Decoding the Valuation Premium: Excessive Progress at a Steep Worth
With quicker, stronger revenue progress, Photo voltaic Industries has a better return on capital employed (ROCE) and return on fairness (ROE) than Apollo Micro. Apollo Micro Programs has additionally skilled speedy progress, however current fundraising has triggered its return ratios to say no.
From a valuation perspective, Apollo Micro Programs is now buying and selling at a big premium not solely to the business median but in addition to the 3-year historic median. Photo voltaic Industries, against this, trades at a premium to the business however at a slight low cost to the historic median. Valuations are undoubtedly excessive, making order e-book execution important.
| Peer Comparability (X) | |||||
| Firm | Worth-to-Earnings A number of | Return Ratios | |||
| Firm | 3Y Median | Trade | ROCE (%) | ROE (%) | |
| Photo voltaic Industries | 90.7 | 95.4 | 53.8 | 38.1 | 32.6 |
| Apollo Micro Programs | 121.0 | 94.0 | 67.4 | 14.5 | 11.8 |
| Supply: Screener.in (Information as of 14 August 2026) | |||||
Pinaka is changing into greater than an indigenous rocket system. It’s changing into a significant progress alternative for firms supplying important components of the ecosystem. Photo voltaic already has a ₹6,084 crore Pinaka order and is focusing on ₹4,500 crore in defence income in FY27.
Apollo Micro Programs, in the meantime, has accomplished negotiations for a 2,000-rocket programme, with an estimated element worth of ₹85 lakh per rocket. The chance is giant however execution shall be key. That mentioned, you possibly can keep these names on your watchlist to trace execution.
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In regards to the Creator: Madhvendra has been deeply immersed within the fairness markets for over seven years, combining his ardour for investing together with his experience in monetary writing. With a knack for simplifying complicated ideas, he enjoys sharing his sincere views on startups, listed Indian firms, and macroeconomic traits.
A devoted reader and storyteller, Madhvendra thrives on uncovering insights that encourage his viewers to deepen their understanding of the monetary world.
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