1. At a Glance
If James Bond and Amul had a baby, it would probably look like Krishna Defence & Allied Industries Ltd (KDAIL) — one half building top-secret devices for the Indian Navy, the other half making robotic milk collectors for dairy co-ops. From torpedo-proof steel to stainless-steel milk cans, this ₹1,184 crore market cap company has turned “Make in India” into a full-blown Make in Everything.
At the current price of ₹794, the stock trades at a spicy P/E of 44x, which means investors are paying a premium for every rupee of “desi defence swag.” Revenue for H1 FY26 stood at ₹1,204.7 million, with a juicy EBITDA of ₹216.2 million and PAT of ₹156.2 million, translating to a 47% YoY profit jump. The order book? A mammoth ₹1,959.8 million, enough to keep factories buzzing and analysts drooling.
With a ROCE of 24.3%, ROE of 18.4%, and zero debt, Krishna Defence looks like that rare Gujarati company that makes more gadgets than PowerPoint slides. But here’s the twist — 86% of its FY24 revenue came from defence, and only 14% from dairy. So yes, national security pays better than milk.
2. Introduction
Let’s get one thing straight — Krishna Defence isn’t your regular smallcap that manufactures “industrial components” and then quietly dilutes equity. This company designs, develops, and manufactures stuff that the Indian Army and Navy actually use. We’re talking about shipbuilding steel, IED containment vessels, modular vehicle barriers, and even special alloy welding wires — the kind of things that make you feel like you’re reading a classified DRDO file.
In the same factory complex, they also assemble Robotic Milk Collection Units (RMCUs) that analyze milk for fat, SNF, and adulteration. Imagine a robot that tests milk and then gets redeployed to check submarine seals — efficiency level: Indian Jugaad.
Incorporated in 1997, KDAIL has evolved from a fabricator of steel parts to a multi-sector manufacturer straddling defence, dairy, and advanced communications. With DRDO transfer-of-technology agreements and a growing presence in Electronic Warfare (EW), the company has carved out a unique niche: half lab coat, half camouflage uniform.
The cherry on top? They’re now building India’s most advanced Autonomous Underwater Vehicle (AUV) under Make in India, in collaboration with Planys and Conceptia. So, next time you see a robot submarine cruising underwater, it might have a “Made in Gujarat” tag.
3. Business Model – WTF Do They Even Do?
KDAIL’s business model can be summed up as: “If it’s metal, mechanical, and mysterious, we’ll make it.”
In Defence, the company makes products that are less about glamour and more about grit — shipbuilding steel sections, special alloy ballast bricks, improved space heating devices for soldiers, modular barriers, and welding consumables. Recently, they’ve moved into RF, microwave, optics, and electronic communication systems, through Waveoptix Defence Solutions Pvt. Ltd., their Bengaluru-based associate.
In Dairy, they produce milk cooling tanks, robotic collection units, and stainless steel cans for cooperatives like Verka, Hatsun, Katraj, and Aavin. This segment contributes only 14% to revenue but keeps the
cash flow steady — because milk may not have high margins, but at least it doesn’t get embargoed.
With three manufacturing facilities — Kalol (40,000 sq. ft.), Halol (60,000 sq. ft.), and Bengaluru (2,000 sq. ft.) — the company covers both heavy fabrication and high-tech electronics. The dual structure allows them to balance defence lumpy orders with steady dairy demand.
So yeah, Krishna Defence is like a Gujarati buffet — everything from radar circuits to milk cans, served with balance-sheet discipline and extra ROE chutney.
4. Financials Overview
| Metric | Q2 FY26 (₹ mn) | Q2 FY25 (₹ mn) | Q1 FY26 (₹ mn) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 1,204.7 | 940.0 | 1,021.0 | 28.1% | 18.0% |
| EBITDA | 216.2 | 153.0 | 191.0 | 41.3% | 13.2% |
| PAT | 156.2 | 106.0 | 127.0 | 47.4% | 22.9% |
| EPS (₹) | 10.47 | 7.10 | 8.05 | 47.4% | 29.9% |
Commentary:
When your EBITDA margin hits 18%, and you still haven’t borrowed a paisa, that’s called “Desi Defence Efficiency.” The company’s YoY PAT growth of 47% shows not just operational leverage but also better execution in high-value orders. And that EPS of ₹10.47 per quarter annualized to ₹41.88, gives a trailing P/E near 19x — quite different from the reported 44x (thanks to the TTM distortion). Someone give NSE a calculator.
5. Valuation Discussion – Fair Value Range Only
Let’s break it like an auditor doing yoga:
(a) P/E Method:
- TTM EPS = ₹18.5
- Industry average P/E (Aerospace & Defence) = ~65x
- Conservative band: 35x–55x
- Fair Value = ₹18.5 × (35 to 55) = ₹648 – ₹1,018
(b) EV/EBITDA Method:
- EV = ₹1,157 Cr
- EBITDA (FY25) = ₹38 Cr
- EV/EBITDA = 30.4x (high but sector-standard)
If we normalize to sector mean (20–25x): - Fair EV = 20×38 = ₹760 Cr → Equity value ≈ ₹780 Cr
- Fair value range = ₹700 – ₹850
(c) Simplified DCF (educational)
Assume 25% EPS CAGR for 5 years (given historical 96% 5-year profit growth), terminal growth 5%, discount 12% → Implied value ≈ ₹880–₹1,050
📘 Educational Disclaimer:
This fair value range (₹700–₹1,000) is purely for educational illustration and not investment advice.
6. What’s Cooking – News, Triggers, Drama
The company has been busier than a DRDO scientist on Republic Day:
- Oct 2024: Bagged a ₹88.4 Cr MoD order for special weld consumables — because when the Navy says “weld it,” Krishna delivers.
- Sep
