Krishna Defence Sails Strong: H1 FY26 Sees Record Revenue and Strategic Expansion

Krishna Defence and Allied Industries Limited (KDAIL), a prominent indigenous defence manufacturing company, has reported an exceptional financial performance for the first half of fiscal year 2026 (H1 FY26). The company achieved its highest-ever half-yearly revenue, EBITDA, and net profit, underscoring robust growth and strategic execution. Revenue from operations surged by 28.1% year-on-year to INR 120.47 crore, while EBITDA witnessed a remarkable 52.9% increase to INR 21.62 crore. Net profit soared by an impressive 71.0% to INR 18.38 crore, reflecting enhanced operational efficiencies and a healthy expansion in margins. EBITDA margin expanded by 291 basis points to 17.9%, and net profit margin improved by 400 basis points to 15.3%.

The company's revenue mix for H1 FY26 remained heavily skewed towards the defence sector, which contributed 92% of the total revenue, amounting to INR 110.83 crore. The dairy segment accounted for the remaining 8%, generating INR 9.64 crore. Within the defence segment, bulb bars constituted approximately 65% of the revenue, weld consumables 15%, and HVF profiles around 20%. This strong performance is attributed to increased demand for indigenously developed defence systems and the successful commissioning of additional manufacturing capacities.

Strategic Initiatives Driving Future Growth

Krishna Defence is actively pursuing several strategic initiatives to sustain its growth momentum and strengthen its position in the defence and allied industries. A significant milestone was the operationalization of expanded manufacturing capacity for shipbuilding steel sections in April 2025. This expansion effectively doubled the company's total production capability, positioning it to meet the growing demand from both naval and commercial shipbuilding sectors. This move is a direct response to the government's focus on bolstering indigenous defence manufacturing.

Another groundbreaking project is the commencement of construction for India's largest Autonomous Underwater Vehicle (AUV), designed by the Indian Navy. This ambitious undertaking, which involves leading industry partners, places KDAIL at the forefront of high-end underwater technologies. The prototype is expected to be in the water by December 2026, with revenue generation projected to begin in FY2027. This initiative aligns perfectly with the nation's 'Make in India' objectives and future defence needs.

Diversification and Partnerships

KDAIL is also diversifying its product portfolio and market reach through strategic partnerships and certifications. The company secured BV class certification for its Bulb Bars, a critical component used as stiffeners in shipbuilding. This certification enables KDAIL to expand into non-defence commercial shipbuilding sectors, thereby broadening its revenue streams. Furthermore, approvals for LRS and IRS certifications are on the horizon, which will further enhance its capabilities in the commercial maritime industry.

In a move to bolster its presence in advanced defence systems, Krishna Defence is making steady progress on a joint venture with VABO Composite from the Netherlands for composite doors and hatches. The dedicated manufacturing facility for this venture is planned for commissioning in Q4 FY26, with revenues anticipated by FY27. The company also increased its shareholding in Waveoptix Defence Solution Private Limited, an associate company specializing in defence electronics and tactical communication solutions, to 40%. Waveoptix delivered a strong H1 performance, reflecting the increasing demand in this critical area.

Management Outlook and Financial Discipline

Management expressed confidence in maintaining a growth trajectory, aiming for a 30-40% Compound Annual Growth Rate (CAGR) over the next 3 to 5 years. This outlook is supported by a robust closing order book of INR 196 crore as of September 30, 2025, and a strong pipeline of tenders. The company plans an annual CapEx of INR 5-10 crore, primarily focused on improving efficiency and introducing better manufacturing practices, rather than large-scale asset augmentation. This reflects an asset-light strategy, where non-critical jobs are outsourced to optimize capital allocation.

Despite the strong performance, management transparently acknowledged a late delivery charge of INR 5.25 crore in FY2025 due to initial development delays for a commercial project. They also addressed questions regarding the delay in their main board listing, attributing it to procedural requirements and internal document preparation post-warrant conversion. The company's proactive approach to indigenisation, strategic partnerships, and disciplined financial management positions Krishna Defence and Allied Industries Limited for sustained growth in India's burgeoning defence and maritime sectors.