For a long time, ideaForge Technology looked like a stock built entirely on potential. India would need drones. Warfare was changing. Surveillance along borders would become critical. The government wanted more indigenous defence technology.
Investors loved the story. The business, however, looked far less exciting. After listing, Ideaforge’s numbers deteriorated sharply.
Ideaforge Technology Limited 1-Year Share Price Chart
Annual revenue fell from Rs 314 crore in FY2024 to Rs 161 crore in FY2025. Operating margin collapsed from positive 18% to negative 32%, while the company swung from a profit of Rs 45 crore to a loss of Rs 62 crore. Quarterly numbers became even more volatile. Revenue fell from Rs 102 crore in the March 2024 quarter to just Rs 18 crore by the December 2024 quarter.
Operating margin crashed from positive 15% to negative 99%. By the June 2025 quarter, revenue had dropped further to Rs 13 crore and operating margin had slipped to negative 149%. Naturally, the market lost patience. Ideaforge had listed in July 2023 at an issue price of Rs 672 per share and opened near Rs 1,300 on listing day as investors rushed into the defence technology theme.
But weak order conversion and widening losses pulled the stock sharply lower over the next two years. By early April 2026, the stock had fallen to nearly Rs 360. Then came the March 2026 quarter. Revenue jumped to Rs 141 crore. Operating profit stood at Rs 62 crore against an operating loss a year earlier. Net profit came in at Rs 60 crore and operating margin rose sharply to 44%.
The stock reacted immediately. From around Rs 400 in early April 2026, Ideaforge surged to above Rs 800 within a month as investors rushed back into the defence drone theme. But that also raises a much bigger question.
Does this rally have legs to stand on?
Is this the beginning of a genuine long-term defence manufacturing story? Or is the market once again extrapolating one strong quarter too far into the future? Because the latest rally is built on a very specific assumption. One, that India is entering a large and sustained military drone spending cycle. And two, that Ideaforge will emerge as one of the biggest beneficiaries.
That may happen. But investors should remember that defence manufacturing stories often look strongest precisely when order visibility temporarily improves. The difficult part is building a stable long-term business around inherently volatile procurement cycles. And that is exactly where the real debate around Ideaforge begins.
India’s military suddenly wants far more drones
The Russia-Ukraine conflict and recent India-Pakistan tensions have changed military thinking globally. Cheap drones destroying expensive military hardware completely changes battlefield economics. A drone costing a few lakh rupees can damage or destroy equipment worth crores. Naturally, militaries start paying attention very quickly.
ideaForge highlighted that the Defence Acquisition Council has cleared proposals worth Rs 2.38 lakh crore, including unmanned aerial vehicle procurement. Reports also indicate drone procurement opportunities worth nearly Rs 20,000 crore may emerge during FY2027.
Management now believes this procurement cycle is only beginning. The company said several large opportunities are moving through approval and tendering stages, while the current opening order book of around Rs 310 crore is expected to be fully executed during FY2027 itself. At least for now, procurement finally appears real.
Ideaforge may already have a head start
Today, many companies can assemble drones. Very few can build drones that continue functioning reliably during actual military conditions. That difference matters.
- Military drones are judged differently from commercial drones.
- Can the drone function during signal jamming?
- Can it survive high-altitude operations?
- Can it continue operating in extreme weather conditions?
- Can it fly when communication systems are being disrupted?
That is where Ideaforge appears to be positioning itself differently. The company says it holds nearly 50% market share in India’s unmanned aerial vehicle market and is ranked third globally in dual-use drones, meaning drones used in both civil and defence applications.
It was also among the first Indian firms to develop Vertical Take-Off and Landing hybrid drones and high-altitude drones.
More importantly, the latest quarter saw the delivery of electronic warfare-resilient systems following extensive testing.
In simple terms, these are drones designed to continue operating even when enemy systems attempt to jam or disrupt signals.
Ideaforge has spent years building its own communication systems, navigation software, autopilot technology and payload integration systems. The company has more than 106 patents granted or under process.
The company is now preparing for the next phase
Until recently, most of Ideaforge’s business came from surveillance and mapping drones. Now the company is openly talking about combat drones. It is developing long-range strike platforms, loitering munitions and kamikaze drones through internal development and partnerships.
Importantly, the company does not see this as a completely new business. It believes surveillance drones and combat drones will increasingly work together, where the intelligence gathered by one drone helps guide the strike capabilities of another.
The company also expects margins to remain healthy. It is guiding for gross margins in the range of 50% to 55% for FY2027 as customers increasingly demand advanced electronic warfare-resistant systems instead of basic drones.
The company received orders worth around Rs 530 crore during FY2026, the highest in its history and ended the year with an order book of around Rs 314 crore, down from around Rs 351 crore in December after large deliveries during the March quarter.
The company also received its first order from the United States during the quarter. It became the first Indian drone company to train North Atlantic Treaty Organization forces at a United States test pilot school. That improves credibility significantly, even if revenues remain small for now.
But investors may be ignoring some uncomfortable questions
Right now, almost everyone is looking at the opportunity. But very few are discussing what could go wrong. The first issue is obvious. Defence procurement remains highly unpredictable. Ideaforge’s own history proves this. Within just a few quarters, revenue moved from Rs 102 crore to Rs 18 crore and operating margins swung from positive 15% to negative 149% before recovering sharply again. That kind of volatility does not disappear overnight.
The second issue is competition.
India’s drone market is now attracting enormous capital and policy attention. Large defence companies, start-ups, electronics manufacturers and even global firms are aggressively building drone capabilities. Over time, pricing pressure could rise sharply.
The third issue is whether the current surge in defence spending is partly driven by recent conflicts and tensions, which may cool off over time. Whenever geopolitical tensions rise, defence themes become fashionable very quickly. Markets often assume spending growth will continue in straight lines.
Reality is usually more uneven. Procurement cycles come in waves. A few delayed tenders or slower government approvals can sharply affect revenues and profitability.
The balance sheet still needs monitoring
Debtor days increased sharply to 204 from 127 a year earlier. Inventory days too followed the trend, up 550 from 312.
Operating cash flow remained negative at around Rs 63 crore due to sharply increased working capital requirements.
Borrowings also rose to around Rs 16 crore to 84 crore in FY26.
Management itself acknowledged risks around supply chains, procurement timing, working capital cycles and quarterly lumpiness. That may actually be the most realistic part of the story. Because while India’s drone opportunity is clearly becoming larger, defence manufacturing rarely moves in straight lines.
A few delayed tenders, slower approvals or stretched payment cycles can sharply affect revenues and margins for companies like Ideaforge. And the company’s own history already shows how volatile the business can become within just a few quarters.
The market is now betting on something much bigger
At roughly Rs 3,500 crore of market cap and a stock price above Rs 800, the market is clearly no longer valuing Ideaforge based on current earnings alone. Investors are betting that India is entering a multi-year military drone spending cycle and that Ideaforge becomes one of the biggest domestic beneficiaries. That may well happen.
The company clearly has technological depth, an early-mover advantage and strong positioning in a sector that is becoming strategically important. But defence manufacturing stories also tend to attract excitement much faster than stable long-term earnings. The latest quarter suggests procurement activity is finally becoming real.
The bigger question is whether this becomes a durable long-term business cycle or simply another temporary defence-market frenzy driven by current geopolitical tensions.
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.
Manvi Aggarwal has been tracking the stock markets for nearly two decades. She spent about eight years as a financial analyst at a value-style fund, managing money for international investors. That’s where she honed her expertise in deep-dive research, looking beyond the obvious to spot value where others didn’t. Now, she brings that same sharp eye to uncovering overlooked and misunderstood investment opportunities in Indian equities. As a columnist for LiveMint and Equitymaster, she breaks down complex financial trends into actionable insights for investors.
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