India’s aerospace and defence sector is entering a phase of steady, broad-based expansion.
The government’s strong policy push, rising export momentum, and higher domestic procurement are all driving this shift. As per the MTAR annual report, Defence exports are set to reach ₹500 billion by 2029, while total production is projected to cross ₹3 trillion by the end of the decade. Alongside this, India’s space economy, valued at around $8.4 billion, is expected to grow nearly 5X to $44 billion by 2033, supported by private participation through IN-SPACe.
Together, these factors are shaping a long-term growth runway for aerospace and defence companies, making the segment a structural play on India’s push for self-reliance and technology leadership. Similarly, here are three companies that have now become aerospace powerhouses.
#1 MTAR Technologies: Fueling India’s leap in space and defence innovation
MTAR is a national leader in the manufacture of precision engineering systems in several strategic sectors, including aerospace and defence, civil nuclear energy and clean energy, including fuel cells. The aerospace sector is important to MTAR, and accounted for 13.7% of revenue in FY25.
Broad play across space and defence programs
It covers both the space sector and the defence market, primarily mission-critical precision-engineered systems. It provides a diverse portfolio of complex mechanical subsystems and components for space launch vehicles, missiles, and aircraft programs. These products include propulsion systems, aerostructures, and actuation systems.
Deep partnerships with India’s strategic agencies
The company is a strategic partner to Indian government entities, including the Indian Space Research Organisation, the Defence Research and Development Organisation, and Hindustan Aeronautics. Internationally, it supplies to global companies such as GKN Aerospace, Thales, IAI (Israel Aerospace Industries), Elbit Systems, and Collins Aerospace.
Building capability in next-gen propulsion systems
Under Propulsion Systems, the company manufactures critical components for liquid and cryogenic engines used in space launch vehicles. Major systems supplied include the Vikas liquid propulsion engine (used in PSLV), cryogenic upper-stage subsystems, and components such as turbo pumps, booster pumps, gas generators, and injector heads.
The Company is also contributing to the development of the Semicryogenic engine, which is expected to enhance the payload capacity of GSLV. Additionally, MTAR manufactures airframes, canisters, gearboxes and actuation systems.
It also supplies Electro-mechanical actuators for various Aerospace and Defence programs, and supplies the Magnesium gearbox for Helicopters. MTAR has successfully delivered 5-ton and 10-ton actuators for the LCA Tejas program.
Aerospace expansion to drive future growth
In addition, the company is now strengthening its position by expanding into new products such as actuation systems. It has also begun developing combustor assemblies for scramjet engines for domestic defence programs, thereby entering next-generation propulsion technologies. To cater to the demand, MTAR has started a dedicated Aerospace facility in January 2025.
This facility is expected to generate significant revenues by catering to leading multinational corporations and Indian entities. This expansion is crucial for enabling the Company to ramp up volumes and address complex, high-value programs from multinational clients.
The MNC Aerospace vertical is expected to grow by 45% to 50% year-on-year over the next five years due to volume ramp-up. Overall, MTAR expects an 80% growth in the aerospace and defence segment in FY26, with the space system alone projected to rise by 20%.
MTAR Financial Performance
A Muted H1FY26: MTAR’s short-term Hurdle
On the financial front, revenue declined 8.3% year-on-year to ₹2.9 billion in the first half of fiscal 2026. Exports accounted for 78% of revenue, while 22% came from the domestic market.
EBITDA (earnings before interest, taxes, depreciation, and amortisation) also declined 14.9% to ₹454 million, while margins fell 130 basis points (bps) to 15.5%. Consequently, profit after tax (PAT) fell 34.9% to ₹151 million.
#2 Apollo Micro Systems: Engineering India’s defence and space future
Apollo Micro Systems specialises in electronic and electromechanical systems for missile systems, satellite and space systems. It has a long-standing presence in the aerospace domain, specialising in high-performance, mission-critical electronic and electromechanical solutions for India’s defence and space sectors.
Strengthening presence across aerospace and defence systems
The Aerospace division covers several strategic areas, including avionics and aircraft systems, and its key products include the Unified Avionics Computer and PCM encoders and decoders. The company also develops rugged avionics modules and has experience in Radio Navigation Systems related to aviation.
In the space systems and satellite technology space, the company delivers subsystem-level components that are specifically tailored for space-qualified performance. This collaboration is long-standing. The company is credited with applying its deep understanding of Space systems to create advanced Payload Checkout and Telemetry Systems for critical space programs.
The company is also deeply involved in the aerospace defence market, where it develops weapon electronics and platforms for aerial deployment. Specific munitions and programs include aerial bombs and guided munitions. In the explosive division, the company acquired IDL Explosives in May 2025.
Evolving from Subsystem Supplier to Full-Scale Platform Provider
The company’s overarching vision is to emerge as a world-class company and a unique solution provider offering “Total Solutions Under One Roof.” Apollo is evolving from a subsystem supplier to a full-spectrum systems and platform provider.
The strategy is to transition from a Tier 2/3 supplier to a Tier 1 supplier and ultimately a Global Original Equipment Manufacturer (OEM), delivering complete solutions. To achieve this goal, it has recently acquired IDL Explosives and strengthened its business through partnerships.
IDL explosives Buyout Transforms Business Model
Apollo acquired IDL Explosives in an all-cash deal worth ₹1.1 billion. This acquisition provides backward integration and entry into propellants and warheads, transforming Apollo into a fully integrated Tier 1 defence equipment manufacturer.
IDL, in FY24, reported a turnover of ₹6.2 billion, which is expected to more than double Apollo’s consolidated revenue base. Apollo had reported a revenue of ₹5.6 billion in FY25. In addition, there are multiple other alliances.
Strategic partnerships deepen defence ecosystem
During FY25, Apollo also strengthened its ecosystem through several strategic partnerships.
- It signed Memoranda of Understanding (MoUs) with Munitions India for identified opportunities and with Tata Consulting (TCL) for defence products.
- It became an MoU Partner to Bharat Dynamics for the joint development of naval platforms.
- The company also partnered with Garden Reach Shipbuilders for joint development and supply of advanced weapons and electronic systems.
- It is an approved collaborative R&D Partner for Bharat Electronics.
- Apollo entered a consortium agreement with Redon Systems to jointly manufacture systems for loitering munitions and allied systems.
- It also formed a strategic partnership with Troop Comforts for joint manufacturing, marketing, and development of advanced air defence systems.
Robust growth outlook backed by core business strength
Coming to its financials, the company’s revenue in H1 of FY26 increased by 1.4 times year-on-year to ₹3.6 bn, driven by the strong execution of the order book. EBITDA surged 1.8X to ₹1 billion, while margin expanded by 600 bps to 27.9%. PAT, as a result, almost doubled to ₹477 million, up from ₹241.6 million in H1FY25.
Apollo Financial Performance
Apollo is highly optimistic about its revenue trajectory based on its core business. It expects revenue from its core business (excluding any contribution from IDL Explosives) to grow at a Compound Annual Growth Rate (CAGR) of 45% to 50% over the next two financial years. The company also expects continuous margin expansions.
#3 Astra Microwave: Elevating India’s aerospace radar and avionics capabilities
Astra Microwave operates across several key sectors, including Defence, Aerospace, Space, Meteorology, and Telecom. The company designs, develops, and manufactures Defence, Aerospace & Space Electronics systems, sub-systems and components. It is recognised in this field, with the SIATI Aerospace Award (2022) and the Aerospace and Defence Award (2022).
A significant area of contribution is in air-borne radar systems for fighter planes. In 2022, it delivered the Active Array Antenna Unit (AAAU) for the Uttam AESA Radar to DRDO. This system is critical for the LCA Mk1A fighter aircraft. The technology developed for the AAAU program was subsequently leveraged for other high-profile DRDO projects, including the LCA Mk II.
Astra also works with defence public sector undertakings and is involved in jammer programs for fighter aircraft in India, including the LCA Mk1A and Sukhoi-30MKI. The company supplies telemetry subsystems for aircraft such as the LCA Tejas and intermediate jet trainer aircraft. The radar electronics it designs and manufactures are used by the aerospace for air traffic control.
Financial performance strengthens with margin expansion
Coming to its financials, Astra’s revenue grew 29% year-over-year to ₹2.0 billion in the first quarter of FY26. Its operating margin also expanded by 500 basis points (bps) to 20.5%. As operating leverage kicked in, PAT grew 126.2% to ₹160 million.
Its order book stood at ₹18.9 billion as of Q1FY26, which gives revenue visibility of about 2 years as per FY25 revenue (₹10.5 billion). Management also expects to book another ₹11 billion or so by FY26 end, and targets a total order win of around ₹13-14 billion for the financial year.It aims to grow its top line by around 20% to ₹12 billion, and bottom line by 18% in FY26.
Big beneficiary of defence exports
In Q1FY26, the company generated 86.4% of its revenue from defence, and 10% from exports, which is similar to FY25 (10.5%). The company aims to increase export revenue contribution to 30% in the next 2-3 years, with domestic contribution at 70%.
Exports contributed 10% to revenue in Q1FY26.
The company estimates the potential total addressable market opportunity for exports to be around ₹10 billion by FY28. Astra is focusing on upgrading its Monolithic Microwave Integrated Circuit chips portfolio (currently over 40 chips) to compete in the global markets.
It sees a potential to sell chips in excess of $50 million or more over the next 5 years from this portfolio alone. The company is building global relationships, such as with Teledyne, to enable these sales. Astra also intends to market its new solutions, including its three new 100% Astra radars and anti-drone systems, to the global market.
Are valuations at a premium?
From a valuation perspective, both MTAR and Apollo Micro are trading at a significant premium to their 5-year median price-to-earnings (P/E) multiples, and also to the industry P/E. However, Astra is trading at a slight discount to the median and roughly in line with the industry P/E.
Valuation Comparison (X)
| Company | P/E | 5-Year Median P/E | Industry P/E |
| MTAR | 172 | 83.4 | 63.7 |
| Apollo Micro | 109 | 38.8 | 64.5 |
| Astra Microwave | 61.2 | 54.9 | 63.7 |
India’s aerospace and defence sector is still at an early stage but growing fast. MTAR, Apollo Micro, and Astra Microwave are emerging as key beneficiaries of rising defence spending and export momentum. While valuations for some appear stretched, the long-term growth potential remains intact as India advances toward self-reliance in defence manufacturing.
Disclaimer
Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data was not available have we used an alternate but widely used and accepted source of information.
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About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
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