Krishna Defence & Allied Industries Ltd Q2 FY26 – The Defence Darling Building Robots for Navy and Milk Tanks for Cows

1. At a Glance

If James Bond and Amul had a baby, it would probably look likeKrishna Defence & Allied Industries Ltd (KDAIL)— one half building top-secret devices for theIndian Navy, the other half makingrobotic milk collectorsfor 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-blownMake in Everything.

At the current price of₹794, the stock trades at a spicyP/E of 44x, which means investors are paying a premium for every rupee of “desi defence swag.” Revenue forH1 FY26 stood at ₹1,204.7 million, with a juicyEBITDA of ₹216.2 millionandPAT of ₹156.2 million, translating to a47% YoY profit jump. The order book? A mammoth₹1,959.8 million, enough to keep factories buzzing and analysts drooling.

With aROCE of 24.3%,ROE of 18.4%, andzero 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 theIndian Army and Navyactuallyuse. We’re talking aboutshipbuilding steel, IED containment vessels, modular vehicle barriers, and evenspecial 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 assembleRobotic Milk Collection Units (RMCUs)that analyze milk forfat, SNF, and adulteration. Imagine a robot that tests milk and then gets redeployed to check submarine seals — efficiency level: Indian Jugaad.

Incorporated in1997, KDAIL has evolved from a fabricator of steel parts to a multi-sector manufacturer straddlingdefence, dairy, and advanced communications. With DRDO transfer-of-technology agreements and a growing presence inElectronic Warfare (EW), the company has carved out a unique niche: half lab coat, half camouflage uniform.

The cherry on top? They’re now buildingIndia’s most advanced Autonomous Underwater Vehicle (AUV)under Make in India, in collaboration withPlanys 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.”

InDefence, 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, andwelding consumables. Recently, they’ve moved intoRF, microwave, optics, andelectronic communication systems, throughWaveoptix Defence Solutions Pvt. Ltd., their Bengaluru-based associate.

InDairy, they producemilk cooling tanks, robotic collection units, andstainless steel cansfor cooperatives likeVerka, 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.), andBengaluru (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 fromradar circuitstomilk cans, served with balance-sheet discipline and extra ROE chutney.

4. Financials Overview

Commentary:When yourEBITDA margin hits 18%, and you still haven’t borrowed a paisa, that’s called “Desi Defence Efficiency.” The company’sYoY PAT growth of 47%shows not just operational leverage but also better execution in high-value orders. And thatEPS of ₹10.47 per quarterannualized 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