Top Drone Stocks in India: Promising Investments in a Growing Industry

In the last few years, the drone industry has been able to grow tremendously. Automation intelligence is used in the automation tools and wireless communication. These drones are easily embedded with new technologies for giving smart solutions. In this article, We will explore the top drone stocks in India and its potential growth. It will help you to find the best drone stocks to invest.

Comparison of top Drone Companies in India 2024

Here is the comparison of top drone stocks in India and these companies sorted based on its 1 year return   

Overview of top Drone Stocks in India (2024)

Hindustan Aeronautics Ltd

Hindustan Aeronautics Ltd. (HAL) founded on 23 Dec 1940 and incorporated in Bangalore. HAL is well-established in the defense and aerospace domain in India.

It has been involved in the manufacturing of aircraft, helicopters, and other light combat systems for many decades. HAL has good market coverage in both international and domestic markets. It satisfies most of the requirements of the defense sector in India through its excellent manufacturing and innovation techniques.

HAL strives towards achieving the Make in India concept in the defense sector. For this long term project, the Indian government allocated budgets in HAL. In the future, the company is broadening its range of products with innovation. 

So far the performance of the company has continued to be profitable from the beginning of its establishment. For instance, in the financial year 2021-2022, the company’s net worth was ₹5,086 crores. Its total profit is increased in the next fiscal year 2022-2023 as ₹5,200 crores.  

Over the last five years up to date, the HAL’s revenue has been consistently increased.

Drone Destination Ltd

Drone Destination Ltd. is one of the newcomers into India’s booming drone industry offering drone training, services and solutions to commercial, industrial and government users. Its drone technology application is extending to large agricultural, surveillance and logistics requirements. 

Partnerships with important organizations are the backbone of the business model of Drone Destination.The firm has earned access to strategic partnerships; one with the National Skill Development Corporation (NSDC) and other with Indira Gandhi Rashtriya Uran Akademi (IGRUA).

Over the last twelve months, Drone Destination Ltd has reached significant growth in this drone sector. As of September 2024, its stock price is at around ₹260, and its 1 year return 123.14%. It shows the company’s performance that it is slowly establishing itself in the drone market. This expansion is demonstrated in its return on equity (ROE) which is 17.9%

Also Read: Top 5 Ethanol Stocks in India 2024

Zen Technologies Ltd

Zen Technologies Limited is an Indian defense technology firm that focuses on the design and development of training simulators and combat systems for military and law enforcement agencies. 

Zen Technologies has a strong growth potential as its revenues are increased by expanding government and private defense. Further, it takes the advantages of good policies and active defense upgrades programs, and it receives large projects that provide considerable revenue generation.

The company earned a net profit of ₹55.76 crore for the FY 2022-23, which is an increase from ₹38.02 crore in FY 2021-22. Consequent to high order book and execution of value defense contracts, this profit segment surged by 47%. 

Its drone stock has provided investors with good returns particularly last year where the value of the stock increased by over a hundred percent. Additionally, integrating drone technology based defense solutions seems to be one of the strategies of Zen Technologies for the future. 

Paras Defence and Space Technologies Ltd

Paras Defence and Space Technologies Ltd is leading the charge within the Indian Defense and Space Sector. Its scope of work includes design, development and manufacturing of a variety of defense products with advanced optics and electronics along with space engineering subsystems.

It has strong potential with the current defense modernization and political initiative on space exploration. further it focuses particularly in aiding the ‘Make in India’ campaign.

When analyzing its financial performance, it has been noticed over the previous few years that Paras Defence has been improving its profitability. In FY 2022-23, the company earned a net profit of ₹46.56 crore, which represents a rise of over 62% compared to the net profit of ₹28.73 crore which the company earned in FY 2021-22. 

Info Edge (India) Ltd

Info Edge (India) Ltd. is one of the foremost internet-based companies in India whose business portfolio includes recruitment, real estate, education, and marriage related online court porting. 

Its websites include Naukri.com, 99acres.com, Jeevansathi.com and Shiksha.com To add to this, Info Edge has also invested in other internet companies like Zomato and PolicyBazaar which are valuable additions to the organization. 

Info Edge maintains sustainable profit over the past years and also it gains shareholder trust for a number of years. It has consistent growth with ₹15.56 billion for FY 2021-22 in spite of adverse market conditions. For FY 2022-23, the consolidated profit of the company was reported at ₹16.23 billion. 

Rattanindia Enterprises Ltd

RattanIndia Enterprises Ltd. is a company under the RattanIndia Group. It has interests in several business sectors, such as energy, finance or e-commerce. In recent years, RattanIndia Enterprises has been trying to put more effort into industries with high growth potential including more modern sectors such as electric mobility and drone sectors. 

RattanIndia, through its subsidiary Revolt Motors, holds a significant presence in the Indian electric vehicle market. Further, it has ventured into the rapidly developing drone market via investment in Throttle Aerospace Systems.

RattanIndia Enterprises has undergone a change with respect to its financial performance over these past few years. 

In FY 2021-22, the company’s consolidated revenue was ₹ 23.09 crore. And it has quite improved in the financial year 2022-23, the consolidated revenue of the company was ₹ 544.59 crore due its investment increases in electric vehicle and drone industry. 

However the net profit of the company for FY 2022-23 was ₹ 13.75 crore, even though that is lower than ₹ 23.09 crore in FY 2021-22, it is understandable considering the high costs incurred from the expansion and new ventures. 

Larsen & Toubro Ltd

Larsen & Toubro Ltd (L&T) is associated with certain multinational undertakings with specialization in Engineering, Construction, Manufacturing and Financial Services which rank it among the top in India.

The firm is engaged in infrastructure, heavy industry, power, defense and IT that makes it important in the growth of the economy of India.

L&T has been able to deliver consistent figures in terms of the financial performance. The company posted a net profit of ₹10,947 crore for FY 2022-23, that is ₹ 1,075 crore more than in FY 2021-22, profit growth that was largely driven by efficient execution of projects coupled with more spending on infrastructure. 

For the last few years, in L&T’s stock, the shareholders have been receiving regular dividends together with the appreciation of capital.

DCM Shriram Ltd

DCM Shriram Ltd. is well established in agriculture, TEXTILE and chemicals sector. It has primarily two segments of businesses, sugar and fertilizers. Its chemicals segment comprises units producing caustic soda and PVC resins that find application in various industries. 

The net income for FY 2022-23 was reported at ₹1,051 crore, as compared to the net income of the preceding fiscal year of ₹1,066 crore so its exchange of profits was steady.

The revenue of the company for the year ending March 31, 2023 was reported at ₹9,913 crore representing growth of business in its core segments. 

Its shareholder remains quite comfortable in the past few years having invested in DCM Shriram’s stock owing to its relatively good financial performance and growth strategies.

DroneAcharya Aerial Innovations Ltd

Droneacharya Aerial Innovations Ltd. is well-known for its effective and smart applications in the Indian drone industry especially assisting agricultural education as well as in construction, mining, and town planning. 

The firm specializes in aerial information acquisition by means of drones and analytical services with 3D modeling and precision farming, land mapping and more. 

The company’s business model is based on the increasing use of drones within commercial and government sectors. It has gained an important place in the market through technological innovations and the help of government initiatives.

It has experienced substantial growth in the fiscal year 2023-24 (FY24). The company’s net profit nearly doubled, reaching ₹6.2 crore, up from ₹3.42 crore in FY23. This growth was supported by a significant increase in operating revenue, which jumped 90%, from ₹18.56 crore in FY23 to ₹35.19 crore in FY24. Total revenue, including other income, also increased to ₹37.35 crore from ₹19.13 crore in the previous year.

DroneAcharya’s impressive performance is driven by its expansion in drone training and international services, including drone manufacturing projects. This rapid revenue and profit growth reflects the company’s successful strategy in leveraging new opportunities in the drone sector, positioning it as a key player in the industry.

What are Drone Stocks?

A drone stock is shares of the companies which deal with the design, manufacturing, and operating of the drone (or the Unmanned Aerial Vehicles – UAVs), assets that can be used for multiple purposes. 

Companies can manufacture drones which are mainly designed for military, commercial or industrial purposes, or they can be in the provision of supporting technology and services such as drone data processing, drone cameras and drone based computer software systems. 

The drone industry is developing rapidly, within the variety of applications in sectors such as defense, farming, transportation, building, and indoor surveillance.

Drone sector in India

From the Indian government to commercial application, drones are now used in disaster management, delivery services, surveillance, filmmaking, defense, infrastructure inspection, aerial photography and more. 

The drone industry in India is on a fast track growth with help of technological evolution and active government support.

With the Directorate General of Civil Aviation (DGCA) as a regulatory authority, the Indian government has adopted innovative policies in regulatory governance. According to an analysis report, the Indian drone market is driving significant growth in the worldwide economy.

Usage of Drones in India

Industries such as infrastructure, agriculture, logistics have implemented drone technology for precision and enhanced efficiency. Agricultural drones are furnished with advanced sensors which are used to monitor crop health. And construction companies are using drones for mapping and surveying.

Agriculture: Drones are extensively used in agriculture for crop surveillance, precision agriculture, and it is used as a sprayers for crop protection. To enhance the productivity of farmers and better utilize drone technology.

Security: XIPs facilitate border patrolling and urban surveillance, and emergency management operations in addition to providing timely information to combat personnel. 

Delivery Services: People have the advantage of using drones. They do not need to travel to delivery places. Thus, they will utilize their time to do some other work.

Infrastructure: Apparently, drones can also be used for structural inspection for example bridges, electrical networks, pipelines, places that require efficient and less costly non-destructive forms of examination.

Mapping: Furthermore, drones are valuable for topographic,land surveys and environment surveillance for better geographical information precisions.

Environmental Monitoring: Drones have also been proved essential in the supervision and alteration of environmental change and protecting endangered species’ habitats enhancing the management of natural resources.

Emergency Response: In such settings, drones are used for reconnaissance, assistance in supply of relief items for instance food or medicine, and estimating the extent of damage suffered by the region.

Benefits of Investing in Top Drone Stocks in India

The following are the primary reasons to invest in top drone stocks in India:

High Growth Potential: The drone sector in India is still at its early stage of development with vast potential for advancement as drone technology is being adopted by commercial sectors like agriculture, logistics, and defense etc.

Government Support: The Indian government provides support for growth of the Drone Industry in India through relevant policy frameworks such as the Drone Rules 2021 and the PLI (Production Linked Incentive) scheme.

Diverse Applications: Drones can be adapted to numerous sectors, including agriculture, infrastructure development, healthcare as well as surveillance. This allows for revenue generation by companies in a number of fields.

Technological Innovation: Investment in drone based companies opens up opportunities in modern technologies such as AI, machine learning and autonomous systems which are innovative and advancing the industry.

Strong Market Demand: The use of drones and drone technology is likely to increase as many industries are taking advantage of these devices. So that the drone manufacturing firms are boosting its revenues by implementing drone technology. 

Strategic Role in National Defense: More companies that manufacture defense drones or use these drones for surveillance are likely to benefit from government or defense spending in future.

Long-Term Returns: The growth potential in industry is likely to offer long-term capital appreciation. Once the drone sector transitions from the start-up phase to scale up phase, companies can expand their operations. This transition could provide attractive returns on investments for early investors.

Risks of Investing in Drone Sector Shares in India

The investment in the drone sector in India presents the following such key risks:

Regulatory Risk: The drone business is subject to legal restrictions and government intervention may influence the expansion or limitations of drone business activities.

Technological Risk: New technology can be highly innovative. Sometimes its potential change cannot be easily adopted by the companies.

Intense Rivalry: Competition in the drone industry is constantly increasing. Many new companies and existing organizations enter the market which influence profitability and market share distribution.

Country Risk: If a country may face adverse incidents such as natural disasters, recession, poor performance of core industries like agriculture and logistics may affect the utilization of drones.

Management Challenges: The operational costs in the drone industry could also be impacted by manufacturing and operational cost of production, maintaining expenses, supply chain issues and drone business model configurations.

Market Development: Certain industries, sectors, and regions of the drone solutions market may develop slowly, which may have a negative effect on the growth and profitability of the drone companies. If the market is not fully ready to accept the drone technologies in some areas, which will reduce the profit of drone firms. 

Safety and Liability Risks:The launch of drones have some safety risks such as privacy concerns and security risks, hacking, illegal surveillance, terrorist activities  which will lead to negative impact.

How to Identify Drone Stocks in India?

To identify drone stocks in India, start by analyzing the companies that manufacture drones or developing or implementing drone technology into their devices within the market. The top companies are focused on publicly traded on major stock exchanges including the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). This helps investors can easily find out the drone companies financial health. 

You can evaluate the company based on its stock capacity, technical analysis, fundamental analysis, investment capabilities and liquidity. These drone companies are related to agriculture, defense, logistics and transportation. Finally, stay updated with drone sector news and policies, as they affect the performance and development of the drone industry.

Conclusion

India is experiencing rapid growth of drone usage across several industries for various reasons such as supportive government policies, and increasing the demand of drone technology across many sectors. Drones are used in business operations for making their work easier, cost effective, scalable, efficient particularly in certain areas such as monitoring, mapping, and deliveries.

Sources: Screener, Tickertape