In Part 1 of this story, we looked at the growth of India’s defence exports and how policy reforms, indigenisation initiatives and greater private-sector participation transformed the nation into one of the world’s fastest-growing defence exporters.
Today, defence exports are no longer driven only by large public-sector companies. There’s a growing network of specialised private manufacturers supplying everything from radar systems and military drones to missile components, electro-optics and ammunition.
Many of these companies occupy niche positions within the global defence supply chain: instead of manufacturing complete weapons platforms, they produce high-value components and specialised systems for a global customer base. And several of these manufacturers are small caps (companies listed by market capitalisation, 251 and below on the Indian stock exchanges). Here are eight listed smallcap companies that could benefit as India’s defence export ambitions continue to expand.
Data Patterns (Market cap ₹23,333 cr as of publication)
- Segment: Defence electronics
- Why it matters: Modern defence systems are increasingly driven by software and electronics. Radar systems, mission computers, and electronic warfare equipment make up a growing share of the military spending pie, making defence electronics a fast-growing export sector.
- What they do: Data Patterns is an integrated defence and aerospace electronics solutions provider, and they design and manufacture high-end indigenous defence electronics including radar subsystems, mission computers, electronic warfare systems, avionics (electronic systems used on aircraft, spacecraft, and satellites) naval electronics, satellites and more. Customers include DRDO, ISRO, BEL, HAL and the Indian Armed Forces.
- Exports: Exports make up for 4% of their total revenue. Data Patterns has exported defence electronics and aerospace systems to countries in Europe, Southeast Asia and the Middle East, with repeat orders from the UK.
Apollo Microsystems (Market cap ₹14,754 cr as of publication)
- Segment: Electronic systems
- Why it matters: Missile systems, naval platforms, and modern aircraft require sophisticated electronic subsystems. Companies supplying these niche electronics can supply across multiple defence programmes instead of relying on a single platform.
- What they do: The company manufactures missile electronics, naval electronic systems, aerospace electronics, weapon control systems, and embedded defence systems.
- Exports: Apollo has expanded exports while also supplying electronics across numerous domestic defence programmes. Its acquisition of IDL Explosives (engaged in industrial and defence explosives) has also broadened its defence offerings. In Q1FY26, the company secured its first export order of Rs. 114 cr for the development of an advanced Avionic System, designed to serve both civil and military aircraft platforms.
Azad Engineering (Market cap ₹15,280 cr as of publication)
- Segment: Aerospace precision components
- Why it matters: Today, global aircraft manufacturers, particularly in the defence category, tend to outsource precision-engineered components to specialised suppliers rather than manufacturing the parts in-house.
- What they do: Azad Engineering manufactures aerospace components and turbines, supplying to OEMs (original equipment manufacturers) in aerospace, defence, energy, and oil and gas sectors. The company is a supplier to 6 of the key manufacturers in aerospace & defence industries, including Honeywell, GE and Eaton Aerospace.
- Exports: Azad is a Tier-1 supplier for global aerospace and defence OEMs and a significant portion of its revenue comes from exports across 12 counties, across 12 countries, including the USA, UK, Switzerland, Hungary, Poland, France, Sweden, Germany, Italy, Japan, Saudi Arabia and UAE, Singapore, and South Africa. The company has stated that 40% of its revenues come from the US market.
ideaForge (Marketcap ₹3,948 cr as of publication)
- Segment: Drones
- Why it matters: Modern warfare relies heavily on drone attacks and surveillance, and drones account for one of the fastest-growing areas in defence spending.
- What they do: ideaForge develops a range of unmanned aerial systems, including surveillance UAVs, tactical drones, mapping drones, and border monitoring systems. These platforms are designed for intelligence gathering, reconnaissance, and situational awareness, and are widely used by defence forces and homeland security agencies for missions such as border surveillance, disaster response, and security operations.
- Exports: A majority of the company’s revenue comes from the domestic market, but ideaForge is expanding into international markets as well. They have a fully-owned subsidiary in the US, ideaForge Inc, and is eyeing exports to both the US and Canada.
Zen Technologies (Marketcap ₹16,218 cr as of publication)
- Segment: Combat training and anti-drone systems
- Why it matters: Modern military forces use simulation technologies for training to improve combat-readiness while reducing operating costs.
- What they do: Zen Technologies designs, develops, and manufactures combat training solutions and counter-drone solutions for defence and security forces. This includes combat simulators, shooting simulators, tank simulators, anti-drone systems and counter-UAS (unmanned aircraft system) solutions.
- Exports: The company operates under a single segment of defence and homeland, and in FY25, exports contributed approximately 97% of total turnover. Zen Technologies has expanded its global presence by supplying defence training and simulation solutions to several friendly foreign nations. Its products are used by the armed forces and security agencies of countries including Egypt, Malaysia, Nigeria, Kenya, Mauritius and the UAE. These deployments range from live-fire target systems and weapons simulators to virtual infantry training systems and containerised shooting ranges, helping enhance combat readiness and modernise military training infrastructure.
MTAR Technologies (Marketcap ₹19,722 cr as of publication)
- Segment: Precision engineering
- Why it matters: Advanced missile and aerospace programmes depend on specialised manufacturers capable of manufacturing high-precision components.
- What they do: MTAR develops and manufactures components and equipment for the defence, aerospace, nuclear and clean energy sector. Precision products include missile components, rocket assemblies, cryogenic equipment, and precision engineering systems for defence, nuclear and aerospace customers.
- Exports: Exports made up 86% of the business in FY26, versus 64% in FY25. The company primarily exports to the United States, but also serves OEMs (Original Equipment Manufacturers in North America, Europe, and Asia, providing mission-critical components.
Premier Explosives (Marketcap ₹3580 cr as of publication)
- Segment: Ammunition
- Why it matters: With a rising number of conflicts and geopolitical tensions, countries around the world are rebuilding ammunition stockpiles, increasing the demand for explosives and propulsion systems.
- What they do: Premier Explosives Limited is engaged in the manufacturing of industrial explosives and detonators. They manufacture rocket propellants, explosives, ammunition, pyrogen igniters and defence chemicals.
- Exports: Defence makes up 92% of their order book, and bulk explosives make accounts for 17% of the business segment. It also exports to several countries including Israel, Greece, Jordan, Thailand, Turkey, etc.
Paras Defence (Marketcap ₹9709 cr as of publication)
- Segment: Electro-optics and space
- Why it matters: Modern warfare requires investments in surveillance, targeting and intelligence gathering, and electro-optics play a key role, since EO (electro-optical) and IR (infrared) systems gather, process, and display electromagnetic energy from the visible and thermal spectrums.
- What they do: Paras Defence and Space Technologies (PDST) is an Private sector company primarily engaged in the designing, developing, manufacturing, and testing of a variety of defence and space engineering products and solutions. Within this particular segment, they manufacture night vision systems, electro-optics, space optics, defence optics and imaging systems
- Exports: Paras is the sole manufacturer of submarine periscopes in the Asia Pacific and the only private firm in India that produces indigenous hyper-spectral cameras for space missions. The company supplies to 9 international markets including the USA, Israel, UAE, Singapore, and. Exports contributed 16.28% to the total turnover in FY24.
The Indian defence export ecosystem is transforming and expanding far beyond the public-sector. As defence manufacturing becomes increasingly specialised, companies with expertise in electronics, precision engineering, drones, electro-optics and ammunition are finding opportunities both at home and abroad. While each company operates in a different niche, they all stand to benefit from the same long-term structural trend: India’s ambition to become a leading global defence manufacturing and export hub.
Sources
Data Patterns (India) Ltd share price
‘Exports a key growth driver for Data Patterns’ | BusinessLine (Bangalore) | PressReader
Apollo Micro Systems Ltd share price
Azad Engineering Ltd share price
Azad Engineering Investor Presentation August 2025
Ideaforge Technology Ltd share price
https://www.screener.in/company/ZENTEC/consolidated/
https://www.zentechnologies.com/assets/uploads/files/zen-newsletter-January-2025.pdf
MTAR Technologies Ltd share price | About MTAR Technologie | Key Insights – Screener
MTAR Technologies Limited: Ratings reaffirmed
Premier Explosives Ltd share price | About Prem. Explosives | Key Insights – Screener
Paras Defence and Space Technologies Ltd share price
About Paras Defence – Company Information, Overview, History and Profile