Imagine a sky once lorded over by birds and planes, now teeming with buzzing drones delivering medicines, mapping forests, inspecting pipelines, and patrolling borders. What once felt futuristic has become part of India’s everyday landscape. The country’s drone and aerospace sector is growing rapidly, driven by policy support, defence modernisation, and rising global demand for indigenous technology.
The very foundation of this revolution is precision engineering: propellers, sensors, radar modules, or flight simulators used in every drone, aircraft, or surveillance system are made with microscopic accuracy. This is the engineering excellence whereby machines fly higher, react quicker, and execute complex missions with reliability.
In this article, we explore five precision engineering companies that best represent India’s growing dominance in drones and aerospace, selected for their balanced mix of scale, innovation, and export readiness.
Each of these firms has a critical role to play at various layers of the ecosystem-from the building of complex airframes and defence systems to developing high-value electronic and simulation capabilities. Together, they capture how precision engineering is quietly powering India’s journey from being an assembler of defence hardware to becoming a global aerospace manufacturing hub.
#1 Hindustan Aeronautics
Hindustan Aeronautics is engaged in the business of manufacturing and repairing of aircraft and helicopters.
Hindustan Aeronautics is strengthening its role in precision engineering for aircraft, engines, and drone technologies. The company reported revenue of Rs 30,105 crore in FY25, with orders worth around Rs 1.9 lakh crore still in hand. Over the next five years, it plans to invest Rs 14,000–15,000 crore to boost output of helicopters, fighter aircraft, trainers and engines
On October 17, 2025, HAL inaugurated fresh assembly lines for the LCA Mk-1A and HTT-40 in Nashik, boosting local airframe manufacturing
On September 25 2025, HAL announced that the Ministry of Defence had signed a Rs 62,370 crore contract for the production of 97 LCA Tejas Mk-1A aircraft, marking one of India’s largest indigenous fighter manufacturing orders.
A filing on October 4, 2025, confirmed that new production lines for LCA Mk-1A and HTT-40 aircraft had started at the Nashik facility of HAL; it would support higher throughput in the areas of composite structures and aero-systems assembly.
On October 28, 2025, HAL announced through an official filing that it had signed a Memorandum of Understanding with Russia’s United Aircraft Corporation to manufacture the SJ-100 commuter jet in India — its foray into regional civil-airframe manufacturing, a clear move into high-precision aero-structures beyond defence.
With new facilities coming up in Bengaluru, Nashik, and Tumkuru, HAL is changing from a defence manufacturer to an export-ready aerospace engineering leader.
In the past one year Hindustan Aeronautics share price is up 9.4%.
Hindustan Aeronautics 1 Year Share Price Chart
#2 Bharat Electronics
Incorporated in 1954, Bharat Electronics manufactures and supplies electronic equipment and systems to the defence sector. Company also has a limited presence in the civilian market.
Bharat Electronics is emerging as a powerful precision-engineering hub for aerospace, radar, and unmanned systems on the back of new domestic and export orders that are driving expansion. The order book has touched about Rs 75,600 crore, bolstered by Rs 14,750 crore of inflows in the first half of FY26 from radars, communication systems and combat platforms.
BEL plays a vital role in Project Kusha, the long-range radar and command-control system of DRDO, by developing core radar and control modules that are under fabrication. It is also aligned for avionics work on HAL’s LCA Mk-1A and co-developing integration systems for the Advanced Medium Combat Aircraft and UAV programmes with L&T.
The setting up of a new Rs 1,400 crore Defence System Integration Complex in Andhra Pradesh will anchor missile, radar and drone assembly, thereby giving BEL the capacity to handle large precision platforms in-house. It has also increased investments in automation, cleanroom assembly and microelectronics to improve yield and scale in complex radar and avionics subsystems.
BEL’s export portfolio now includes airborne radars, electronic-warfare suites and drone components supplied to Southeast Asia, Africa and Europe. Management targets increasing exports from 3% to nearly 10% of turnover within three years.
Its latest order disclosure of Rs 792 crore, covering drones, radars, communication and combat-management systems, underlines BEL’s strong order momentum and technical credibility in defence precision manufacturing.
Put together, these initiatives mark BEL’s transition from a conventional defence electronics maker to a systems integrator driving India’s self-reliance in radar, avionics, and unmanned technologies.
In the past one year Bharat Electronics share price has rallied 42.4%.
Bharat Electronics 1 Year Share Price Chart
#3 Bharat Forge
Bharat Forge is engaged in the manufacturing and selling of forged and machined Compoundant for auto and industry sector.
Bharat Forge is increasing its precision-engineering business in aerospace and defence manufacturing despite the slowdown in global commercial markets. The defence and aerospace vertical continues to remain one of the important growth drivers for the company, with the order book at Rs 9,467 crore, including new orders worth Rs 559 crore added during the first half of FY26.
It has consolidated all the defence-focused assets into its subsidiary, Kalyani Strategic Systems Ltd., with a view to strengthening project execution and focusing on high-value components. BFL is bidding for new platforms in missile, artillery, and aerospace systems. Its Indian operations continue to make progress on defence, aerospace, castings, and aggregates, offsetting export weakness in commercial vehicles.
The industrial segment, which includes precision forging for aerospace components, saw stable growth despite subdued demand in North America. European operations are under review to ensure efficiency.
Bharat Forge said it continues to de-risk its portfolio by investing in high-value precision engineering applications, such as aero-engine parts, UAV components, and defence castings. The management now expects new defence and aerospace orders arriving in the second half to support profitability and utilization levels.
With a cash balance of Rs 2,309 crore and a net debt-to-equity ratio of 0.15, the company is well-positioned to scale precision manufacturing for aircraft and drone systems, thus cementing the transformation from an automotive forgings major into a diversified global engineering powerhouse.
In the past one year Bharat Forge share price is up marginally.
Bharat Forge 1 Year Share Price Chart
#4 Larsen and Toubro
Larsen & Toubro (L&T) is a multinational conglomerate which is primarily engaged in providing engineering, procurement and construction (EPC) solutions in key sectors such as infrastructure, hydrocarbon, power, process industries and defence, information technology and financial services in domestic and international markets.
This L&T group company is deepening its role in India’s precision-engineering and aerospace ecosystem through new partnerships and strong order growth in its Hi-Tech Manufacturing segment. The Precision Engineering & Systems (PES) segment has recorded an order book of Rs 32,800 crore as of September 2025, up sharply from the previous year.
L&T has formed a strategic partnership with Bharat Electronics Ltd to support the Advanced Medium Combat Aircraft programme for the Indian Air Force. The consortium submitted an interest expression to the Aeronautical Development Agency, with building and testing news models, scheduled until FY29.
The company is growing its advanced electronic systems sector within the PES division and will improve electronic manufacturing capabilities in Coimbatore as part of a long-term plan. The Heavy Engineering and PES divisions are looking for new opportunites in radar technology, drone parts, and aerospace tools for the defence industry
L&T’s Hi-Tech Manufacturing revenue was up by 33% YoY during Q2 FY26. It was backed by strong execution and margin improvements in Heavy Engineering. Lower early-stage margins in the PES were offset by rising development activity and defence-linked prototypes.
The precision engineering near-term prospects pipeline of the company is valued at Rs 31,500 crore, indicating sustained demand for high-complexity manufacturing in defence, aerospace, and next-generation mobility platforms. Collectively, these actions indicate L&T’s shift from a project-execution leader to an important entity in India’s precision aerospace and drone-manufacturing sector.
In the past one-year L&T share price is up 9%.
L&T 1 Year Share Price Chart
#5 Zen Technologies
Zen Technologies was incorporated in 1996. The company designs develop and manufacture combat training solutions and Counter-drone solutions for defence and security forces. It plays an important role in the adaptation of technologies that are beneficial for the Indian armed forces, state law enforcement agencies, and other security agencies.
Zen Technologies is expanding its influence in the area of precision engineering relating to defence, aerospace, and unmanned aerial vehicle technologies. Steady execution and growing interest in unmanned and simulation systems have supported an order book of about Rs 675 crore, which includes Rs 554 crore of domestic contracts and Rs 120 crore in exports.
Four strategic acquisitions have added depth to Zen’s technology base: Vector Technics brought in-house drone motor capability, while TISA Aerospace further strengthened its offerings in loitering-munition systems; Bhairav Robotics added autonomous defence robotics; and Applied Research International developed its portfolio of naval simulation. Put together, the assets give Zen an end-to-end presence across land, air, and sea defence technologies.
The company recently received two contracts worth Rs 289 crore from the Ministry of Defence for the up-gradation of anti-drone systems, execution of which is to be completed within a year. Management said these projects will reinforce Zen’s operational expertise in counter-UAS and integrated-defence systems.
It has also continued to focus on integrating its subsidiaries, improving production efficiency, and securing large-scale precision orders under the Make-in-India framework. With more than Rs 1,100 crore in liquidity, it is well-positioned to scale up investments in high-precision manufacturing, simulation, and drone-based defence platforms, thus marking its steady evolution from a pure training-simulation company into a diversified aerospace engineering enterprise.
In the past one-year Zen Technologies share price has tumbled 22.1%.
Zen Technologies 1 Year Share Price Chart
Valuations
Let’s now turn to the valuations of the precision engineering companies in focus, using the Enterprise Value to EBITDA multiple as a yardstick.
Valuations of Precision Engineering Stocks in India
| Sr No | Company | EV/EBITDA | Respective Industry EV/EBITDA Median | ROCE |
| 1 | Hindustan Aeronautics | 22.9 | 37.5 | 33.9% |
| 2 | Bharat Electronics | 37.5 | 37.5 | 38.9% |
| 3 | Bharat Forge | 25.1 | 13.9 | 12.2% |
| 4 | Larsen and Toubro | 16.8 | 11.6 | 14.5% |
| 5 | Zen Technologies | 28.9 | 37.5 | 37.2% |
It is a mixed picture. While Hindustan Aeronautics trades below its industry median at 22.9x, it delivers a Return on Capital Employed (ROCE) of 33.9%, thus showing strong efficiency and earnings quality. Bharat Electronics, meanwhile, is right at the median for the defence industry, trading at 37.5 times, yet posting the highest ROCE of 38.9%, reflecting consistency and demand visibility.
Bharat Forge trades at 25.1x versus the industry median of 13.9x. The market seems to be considering growth from its aerospace and defence operations, despite a modest ROCE of 12.2%. Larsen & Toubro is valued at 16.8x versus 11.6x, reflecting investor confidence in its growth in precision engineering and aerospace, although returns remain moderate at 14.5%.
Zen Technologies has a multiple of 28.9x, in contrast to 37.5x for the overall defence sector, and it boasts an ROCE of 37.2%, indicating a possibility for a re-evaluation as execution grows.
Overall, valuations reflect optimism surrounding India’s defence-and-aerospace growth. However, investors need to assess how much of the future earnings growth for the sector has already been captured by the sharp re-rating.
Conclusion
India’s drone and aerospace story is now real. Precision engineering sits at its core, powering everything from radars to avionics, forgings, and flight systems. The five companies in focus bring out how India is moving from heavy manufacturing to high-accuracy engineering. Each brings a different strength-scale, innovation, or export readiness-but all have a common direction.
However, much of this optimism is already priced in. The sector’s re-rating has been sharp, helped by policy support and rising global demand. How well these firms translate large order books into steady profits will determine future returns.
Investors would do well to look a little closer before jumping in. A close look at margins, cash flows, and timelines of delivery has to be carefully undertaken. Precision engineering is all about accuracy, and that’s the same with investment decisions in this space.
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Ekta Sonecha Desai has a passion for writing and a deep interest in the equity markets. Combined with an analytical approach, she likes to dig deep into the world of companies, studying their performance, and uncovering insights that bring value to her readers.
Disclosure: The writer and her dependents do not hold the stocks discussed in this article.
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