The Indian drone industry has been soaring high and is expected to take off even further in the coming years. If statistics are to go by, India’s drone sector has witnessed a 60% growth in 2022, compared to the previous year. The Indian government has set a target of achieving a $1 billion drone industry by 2025, and has taken various measures to support the sector. Some of them include creating a drone task force and launching a dedicated portal for drone operations. Drones are being increasingly adopted in sectors such as agriculture, defense, and logistics, with the agriculture sector being the largest adopter of drones in India.
Read More – Top Defense Stocks in India
Let’s explore India’s drone industry in detail and also find out about the top drone companies in India that investors can consider for their portfolios.
Overview of India’s drone industry
Unmanned Aircraft Systems (UAS), commonly referred to as drones, are advantageous for various sectors depending on their specific requirements. Here are some of them:
- Agriculture: The agriculture sector is one of the top segments where drones are being extensively used for crop monitoring, pesticide spraying, and fertilizer application.
- Mapping and surveying: Mapping, surveying, and creating 3D models of terrain and buildings is another area where drones are being adopted.
- Infrastructure inspection and monitoring: Drones are being used for inspection and monitoring of infrastructure such as bridges, power lines, and pipelines, which can help detect faults and prevent accidents.
- Defense and security: The defence and security sectors are significant adopters of drone technology for surveillance, reconnaissance, and target acquisition.
- Logistics and delivery: Drones are being tested for delivery of goods in the logistics sector, which can help reduce delivery times and costs.
Growth drivers and market potential of drone industry
India’s drone sector has grown significantly in recent years and is expected to continue to grow further. If statistics are to go by, the market for drones in India is projected to grow at a compound annual growth rate (CAGR) of 10.23% between 2023 and 2028.
As per government projections, annual sales turnover of the Indian drone manufacturing sector is likely to go beyond Rs. 900 crores. Additionally, the annual sales turnover of the drone services sector is projected to cross Rs. 30,000 crores in the next three years. This will, in turn, create over 5 lakh jobs in the country.
This growth can be attributed to:
- the increasing adoption of drone technology across various sectors such as agriculture, logistics, and defence.
- The Indian government’s measures to promote the growth of the drone industry, such as creating a drone task force and launching a dedicated portal for drone operations. Government has allocated Rs. 120 crores for a PLI scheme to incentivize drone manufacturing in India. Under the PLI scheme for the drone industry, the government will provide incentives to manufacturers based on a fixed percentage of the value addition they make.
Risk factors and challenges in India’s drone sector
Here are some of the key hurdles being faced by the drone sector in India:
| Points | Description |
| Lack of clear regulations | The absence of clear and consistent regulations for drone operations is a major hurdle for the industry in India. The lack of clarity around issues such as flight clearance, privacy, and data protection is hindering the growth of the industry. |
| Limited manufacturing capabilities | India’s drone manufacturing capabilities are currently limited, which is a challenge for the sector’s growth. The country relies heavily on imports for drone components, which can be expensive and time-consuming. |
| Restricted adoption by businesses | The adoption of drone technology by businesses in India is still limited, due to factors such as cost, lack of awareness, and regulatory challenges. |
| Non-availability of specialised skills | The development of drone technology requires specialised skills such as programming, data analytics, and design, which are currently in short supply in India. |
| Inadequate infrastructure | The development of drone technology requires supporting infrastructure such as charging stations, landing pads, and air traffic management systems, which are currently limited in India. |
Top stocks in the Indian drone industry
Mentioned below are the top drone companies listed on the Indian stock exchanges.
1. DroneAcharya Aerial Innovations
DroneAcharya Aerial Innovations is a company that offers aerial solutions using drones for various industries. They provide services like mapping, surveying, inspection, and monitoring using advanced drone technology. The company is expanding its operations in South-East Asia. The key details of the company are tabled below.
| Category | Details |
| Market Capitalization | Rs. 367 crores |
| PE Ratio | NA |
| Return on Equity | 5.28% (Feb 27, 2023) |
| Debt Equity Ratio | 0.03 (Feb 27, 2023) |
| Promotor’s Holdings | 28.2% |
| Share price | Rs. 153 |
| Dividend Yield | 0 |
2. Paras Defence & Space Technologies
Paras Defence & Space Technologies Ltd is an Indian company that provides design, development, and manufacturing solutions for defence and space applications. The company’s products include defence and space electronics, communication systems, and electro-optic devices. They also offer services like engineering, testing, and logistics support. The company’s subsidiary, Paras Anti-Drone solutions is involved in Development of RF & Microwave systems & Sub-Systems aimed at counter UAV solutions and more.The key details of the company are tabled below.
| Category | Details |
| Market Capitalization | Rs. 1,827 crores |
| PE Ratio | 51.33 |
| Return on Equity | 9.25% (Feb 27, 2023) |
| Debt Equity Ratio | 0.09 (Feb 27, 2023) |
| Promotor’s Holdings | 58.94% |
| Share price | Rs. 460 |
| Dividend Yield | 0 |
3. Zen Technologies Ltd
Zen Technologies is an Indian company that provides simulation-based training solutions for the defence and security sector. Their products and services include simulators for various applications such as weapon training, driving training, and battlefield training. They also offer consultancy services and software solutions related to defence training. The key details of the company are tabled below.
| Category | Details |
| Market Capitalization | Rs. 2,115 crores |
| PE Ratio | 84.72 |
| Return on Equity | 0.81% (Feb 27, 2023) |
| Debt Equity Ratio | 0.06 (Feb 27, 2023) |
| Promotor’s Holdings | 60.19% |
| Share price | Rs. 256 |
| Dividend Yield | 0.04% |
4. RattanIndia Enterprises Ltd
RattanIndia Enterprises is an Indian conglomerate with interests in power generation, finance, and other sectors. The company has recently ventured into the drone industry through its subsidiary, RattanIndia Drones. The subsidiary offers services such as aerial mapping, surveying, and inspection using drones. The key details of the company are tabled below.
| Category | Details |
| Market Capitalization | Rs. 5,508 crores |
| PE Ratio | 13.07 |
| Return on Equity | 141.41% (Feb 27, 2023) |
| Debt Equity Ratio | 1.00 (Feb 27, 2023) |
| Promotor’s Holdings | 74.86% |
| Share price | Rs. 39 |
| Dividend Yield | 0 |
5. DCM Sriram Industries
DCM Shriram Industries is an Indian company that operates in the agri-business, sugar, and chemical industries. They manufacture and sell products such as urea, sugar, and chemicals. DCM Sriram has also bought a 30% stake in Turkish drone maker Zyrone Dynamics, which aims to create UAVs for civilian and military use, including cargo transportation. The partnership will enable Zyrone Dynamics to sell its products in India and other Asian markets and later expand to Europe and Australia. The investment is part of DCM Sriram Industries’ plan to create a global UAV company. The key details of the company are tabled below.
| Category | Details |
| Market Capitalization | Rs. 13,103 crores |
| PE Ratio | 11.76 |
| Return on Equity | 21.03% (Feb 27, 2023) |
| Debt Equity Ratio | 0.27 (Feb 27, 2023) |
| Promotor’s Holdings | 66.52% |
| Share price | Rs. 852 |
| Dividend Yield | 1.80% |
Future outlook and predictions about India’s drone sector
India’s drone sector is expected to grow rapidly in the coming years. The government has announced a number of policies and initiatives to support the growth of the sector. These policies are expected to make it easier for businesses to use drones for a variety of applications, including agriculture, logistics, and infrastructure.
The Indian drone sector is expected to reach a value of $10 billion by 2026. The sector is expected to create over 100,000 jobs in the next five years.
The growth of the Indian drone sector will have a number of benefits for the country. Drones can be used to improve agricultural productivity, reduce logistics costs, and improve infrastructure. Drones can also be used to provide disaster relief and to improve security.
The Indian drone sector is poised for rapid growth in the coming years. The government’s policies and initiatives are expected to support the growth of the sector and to create a number of jobs. The growth of the drone sector will have a number of benefits for the country, including improved agricultural productivity, reduced logistics costs, and improved infrastructure.
Did you know
IdeaForge is another Indian drone manufacturer that primarily serves the defence sector. This company is planning to go public by launching an initial public offering (IPO) worth Rs 1,000 crore (approximately $135 million). As per the company’s DRHP filed with SEBI, the IPO will involve the sale of new shares as well as the sale of shares by existing shareholders.
Conclusion
The drone sector in India is an emerging and promising industry, driven by the increasing adoption of drone technology in various sectors, including agriculture, logistics, and defense. The government’s initiatives, such as creating a drone task force and launching a dedicated portal for drone operations, have supported the growth of the industry. However, the sector still faces some challenges, including inconsistent regulations, limited manufacturing capabilities, and inadequate infrastructure. Despite these challenges, the drone sector in India is poised for growth, and investors can consider top drone companies in India for their portfolios.
FAQs
The key sectors driving the growth of the drone industry in India are agriculture, logistics, and defence.
The Indian government has taken various measures to promote the growth of the drone industry, such as creating a drone task force and launching a dedicated portal for drone operations.
The challenges faced by the drone industry in India include the absence of clear and consistent regulations for drone operations, limited manufacturing capabilities, restricted adoption by businesses, non-availability of specialized skills, and inadequate infrastructure.
Some of the top drone companies in India that investors can consider for their portfolios are DroneAcharya Aerial Innovations and Paras Defence & Space Technologies.
