The interest in drone technology is rapidly growing in India with the country's ambitious plans to become a global drone hub by 2030. The Indian drone market is expected to grow significantly, with opportunities in various sectors, including defence, healthcare, agriculture, geo-spatial mapping, and many more. This optimism and a positive outlook offer lucrative investment opportunities for investors to invest in drone stocks. Let us understand in detail.
List of drone stocks to invest in 2024
The drone industry in India is projected to reach a value of $23 billion by 2030, indicating significant growth potential. Let us have a look at some trending drone stocks:
1. Dixon Technologies (India) Limited (DIXON)
Market capitalisation: Rs. 46,011 crore
- Dixon Technologies is a leading electronics manufacturer in India.
- It is involved in the production of various electronic products, including drones.
- They have been expanding their presence in the drone manufacturing space and are capitalising on the growing demand for drones in sectors like agriculture, surveillance, and logistics.
2. Bharat Electronics Limited (BEL)
Market capitalisation: Rs. 1,66,773 crore
- Bharat Electronics Limited is a state-owned aerospace and defence company in India.
- They are involved in the development and manufacturing of a wide range of defence electronics, including drone-related technologies such as:
- Surveillance systems and
- Communication equipment
- With the increasing focus on defence modernisation and border security, BEL stands to benefit from the growing demand for drone-related products and services.
3. Genesys International Corporation Limited
Market capitalisation: Rs. 2,684.96 crore
- Genesys International is a geospatial technology company that provides mapping, surveying, and geospatial solutions.
- It specialises in providing drone-based aerial surveying services.
- Genesys International is focused on tapping the growing market for drone-based surveying and mapping solutions.
4. Hindustan Aeronautics Ltd (HAL)
Market capitalisation: Rs. 2,37,184 crore
- HAL is a leading aerospace and defence company in India.
- It is primarily engaged in the manufacturing of aircraft, helicopters, and related systems.
- While HAL's primary focus is on manned aircraft and aerospace systems, it also has expertise in:
- Unmanned aerial vehicles (UAVs) and
- Drone technology.
5. Info Edge (India)
Market capitalisation: Rs. 80,605.11 crore
- Info Edge is a prominent internet company in India, known for its flagship job portal Naukri.com and other online properties like 99acres.com and Jeevansathi.com.
- While Info Edge's core business is in the internet sector, it has invested in drone technology startups through its venture capital arm.
- The company is poised to benefit from its drone investments, which can further enhance its stock price and market valuation.
6. RattanIndia Enterprises
Market capitalisation: Rs. 10,353.2 crore
- RattanIndia Enterprises is a diversified conglomerate with interests in power generation, infrastructure, and other sectors.
- The company has announced plans to venture into the drone industry, particularly in areas like:
- Aerial surveys
- Infrastructure inspection, and
- Delivery services
7. Paras Defence and Space Technologies (PDST)
Market capitalisation: Rs. 2,724.15 crore
- PDST is a defence and aerospace company specialising in the manufacturing of:
- Defence electronics
- Aerospace systems, and
- Space-related technologies
- The company also offers solutions related to UAVs and drone systems.
- It provides drone-based surveillance and reconnaissance solutions for defence and homeland security applications.
8. Zen Technologies Ltd.
Market capitalisation: Rs. 8,513.68 crore
- Zen Technologies is a leading simulation technology company in India that offers training solutions for defence and security forces.
- The company has expanded into the development of UAV simulators and drone-related technologies.
- These simulators are used to train UAV operators and enhance their skills in various mission scenarios.
9. Larsen & Toubro Limited (L&T)
Market capitalisation: Rs. 5,20,300.9 crore
- L&T is a leading Indian multinational engaged in engineering, construction projects, manufacturing, and financial services.
- The company is actively involved in the development and integration of drone technology for various applications, including surveillance and reconnaissance.
10. DCM Shriram Industries Limited
Market capitalisation: Rs. 1,729.40 crore
- DCM Shriram Industries is a diversified company with interests in agriculture, industrial chemicals, and engineering products.
- The company has been exploring the use of drones in agriculture for:
- Crop monitoring
- Spraying, and
- Irrigation management
- The company is determined to position itself as a potential player in the drone industry.
What led to this growth
What are drone stocks?
Drone stocks are stocks of companies involved in the design, manufacturing, or deployment of drone technology. They also manufacture and sell drones as a product to various companies operating in numerous industries and sectors. Drone companies also develop software and technology that enhance drone functionality, such as flight control systems, navigation, data processing, and AI algorithms. Once the products are sold, these companies also provide maintenance, repair, and support services for drones. Such companies allow investors to invest in drone stocks when they offer their shares for the first time through an IPO and after their shares are listed on various Indian stock exchanges.
How are the prospects in India?
India has emerged as a significant player in the global drone industry. It holds a promising future ahead. Let us see why:
1. Government initiatives
- The Indian government has taken steps to promote the adoption and development of drones.
- Some popular initiatives such as the Digital Sky platform have been started to create a conducive environment for the growth of the drone industry.
2. Growing market
- India presents a vast and diverse market for drone applications.
- It can be used in various sectors from agriculture and infrastructure to public safety and disaster management.
3. Start-up ecosystem
- India has a vibrant start-up ecosystem, with many companies focusing on drone technology.
- These start-ups are driving innovation and entrepreneurship in the sector leading to its significant growth.
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Here's a brief overview of the trending drone stocks in India based on market capitalisation, along with their focus on drone technology.
How to identify drone stocks in India?
Here is how to identify drone stocks in India:
- Revenue growth: Look for companies that have earned good revenue in the last quarter or financial year. Such companies’ stocks have better chances for a price increase.
- Profitability: Evaluate drone companies based on how much profit they have earned. The profit must be higher each quarter and annually.
- Debt-to-equity ratio: Consider investing in drone stocks that have an ideal debt-to-equity ratio, preferably below 1.
- R&D: Look for drone companies that invest heavily in research and development to improve their products. Such companies are better positioned to have their stocks increase in price.
Features of drone stocks in India
Here are the features of drone stocks in India:
High revenue growth
Drone companies that have diverse products and applications earn high revenue as the products are priced higher and can be used in various industries and sectors.
Market demand
Drones are used in various applications, including aerial surveying, crop monitoring, disaster management, and delivery services.
Limited profitability
Most drone companies in India are new and focus more on improving their products, leading to limited profitability.
Government support
The Indian government supports drone companies through policies and incentives such as the Production Linked Incentive (PLI) scheme.
Technological innovation
One of the most important features of drone stocks in India is that they offer cutting-edge technology like high-resolution cameras, AI-driven automation, and advanced navigation systems.
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Factors to consider when investing in the drone stocks in India
Drone stocks in India have the potential to offer excellent returns based on good technical and fundamental factors. However, to ensure your investments are ideal, here are some factors you should consider before investing in drone stocks in India:
Market potential
Evaluate the market potential of the drone industry in India by analysing overall demand, government initiatives, and use in other sectors such as agriculture and logistics. All these factors should be positive for you to consider investing in drone stocks.
Technology and innovation
Examine various companies' drone products and related technologies, including their features, performance, and potential applications. Furthermore, see if the companies invest in R&D and are improving their products through new versions. Stocks of such companies are better positioned to increase in price.
Regulatory environment
Regulatory compliance is crucial for drone companies to operate effectively. Ensure the company adheres to Indian aviation and drone regulations set by the Directorate General of Civil Aviation (DGCA). Furthermore, see if the government is supporting the industry through new policies and incentives.
Financial health
One of the most important factors while investing in drone stocks in India is reviewing the company’s financial statements to assess revenue growth, profitability, and margins. Strong financial performance can indicate stability and growth potential and higher chances for the stock to increase in price. Evaluate the company's cash flow, as it should be positive for the stock price to increase.
Management and leadership
The company should have skilled and experienced management as they are the core of business operations and profitability. Research the background and expertise of the company's leadership team. Look at the management’s track record in achieving business goals, managing growth, and handling challenges.
Benefits and opportunities of investing in drone stocks in India
There can be numerous benefits to investing in drone stocks in India. These include:
Market expansion and industry growth
The Indian drone industry is the latest innovative sector booming because of the complementary services it provides to other sectors. Since it is on the verge of market expansion, its growth potential can provide good returns to investors.
Increased adoption and integration
Drones are becoming more useful in various industries, and companies are placing orders with drone manufacturers to make custom drones to improve their business efficiency. Due to the increased adoption and integration, drone companies are increasing their revenue every year, making drone stocks a viable investment.
Increased productivity and cost savings
One of the biggest benefits of the drone sector is that it allows for increased productivity and cost efficiency in a business. Using drones, businesses can save significantly on labour costs, complete tasks quickly, and serve customers even in remote locations. Investing in drone stocks can earn good returns based on higher demand.
Innovation and technological advancement
The drone industry is backed by advanced technologies and innovation. Drone companies are making customised drones with the latest technologies that can reduce business costs. Drone stocks of companies that are investing in technologies and innovation can allow for good capital appreciation.
- Dixon Technologies (India) Limited (DIXON)
- Bharat Electronics Limited (BEL)
- Genesys International Corporation Limited
- Hindustan Aeronautics Ltd (HAL)
- Info Edge (India)
- RattanIndia Enterprises
- Paras Defence and Space Technologies (PDST)
- Zen Technologies Ltd.
- Larsen & Toubro Limited (L&T)
- DCM Shriram Industries Limited
Conclusion
The drone sector in India holds immense potential for growth across industries like agriculture, logistics, and surveillance. Due to the increasing demand for UAV technology, investing in drone stocks can offer lucrative opportunities. However, investors must stay updated with market trends and innovations to precisely identify promising investment prospects.
