Archive · 18 Jun 2025
Indian Defence Sector to Expand by 15-17% in FY26
The Indian defence industry is expected to grow strongly in the coming years.
This growth is due to a lot of existing orders and government support.
The government is investing more in defense and encouraging companies to make products in India.
This is helping the industry's revenue increase and keeping profit margins healthy, benefiting companies across the sector.
Indian defence sector entities are projected to see 15-17% revenue expansion in FY26.
Robust growth is fueled by a strong order book, with an OB/OI ratio of 4.4 times in FY25.
Government initiatives like 'Atmanirbhar Bharat' aim to boost domestic production and exports.
Expenditure on domestic defence procurement rose from 61% in FY2017 to 75% in FY2025.
Operating margins are expected to remain healthy at 25-27% in FY2026.
- Who
- Entities in the Indian defence sector.
- What
- Indian defence sector expected to see significant revenue growth.
- When
- FY26, based on an ICRA analysis.
- Where
- India
- Why
- Driven by strong order books, government policies, and increased domestic procurement.
Sectoral Growth
Industry Landscape
Private vs. Public Sector
Sectoral Growth
Increasing private sector participation in land and ICT.
Industry Landscape
DPSUs dominance in naval, aerospace, and armaments.
- Projected Revenue Expansion
- 15-17% in FY26
- OB/OI Ratio (FY25)
- 4.4 times
- Domestic Procurement (FY25)
- 75%
- Defense Budget Capital Outlay Growth
- CAGR of 8.29% over 5 years to FY2026
- Operating Margins (FY26)
- 25-27%
