Drone manufacturing start-up Garuda Aerospace is in talks with several state governments, including Karnataka, Andhra Pradesh, Telangana, Bihar and Madhya Pradesh, to get approval for subsidy for their agricultural drones.
“We are in the last stages of finalization with these states,” said founder and chief executive officer (CEO) Agnishwar Jayaprakash in an interaction with FE.
The company, backed by cricketer Mahendra Singh Dhoni, has received approval for subsidy for its Garuda Kisan drones in Tamil Nadu, Maharashtra and Kerala.
The subsidies are between 40-50% and a part of the government’s larger efforts to promote the use of drones in agriculture. These drones help farmers in identifying crop health, soil analysis, disease monitoring and spraying pesticides, often compensating for manpower shortages.
Farmers with bank loans for Garuda Aerospace agri drones can also be entitled for a 3% interest subsidy under the Agriculture Infrastructure Fund.
Farmers and rural entrepreneurs are not likely to go for these products without any government subsidies, noted Jayaprakash.
Garuda enjoys a 55% market share in the agricultural drone industry and also manufactures drones for use in food delivery, defense infrastructure, solar panel cleaning and surveillance. Valued at $250 million, the company has so far raised $24.3 million in five funding rounds since its inception in 2021, as per Tracxn data.
The company has been profitable for the last two financial years and plans to end the current financial year with a net profit too, Jayaprakash said. In FY23, the company recorded an EBITDA margin of 22%, and a net profit margin of 15-16%. For comparison, in the preceding year, the company had an EBITDA margin of 28-30% and a net profit margin of 24%.
Jayaprakash noted that the year-on-year margin contraction is because the company had incurred more expenses in FY23 to grow its business, including hosting roadshows, events and advertisements.