India Defence Push Lifts Private Players; Zen Technologies, Apollo Micro In Spotlight

Shares of defence companies, Zen Technologies and Apollo Micro Systems (AMC) have rallied as much as 50% over the past month after the government allowed private participation in missile and ammunition production and granted fresh arms manufacturing licences.

The move follows the Ministry of Defence’s October 2025 decision to open up the segment to private players. It comes alongside a sharp rise in defence capital outlay, which now stands at over ₹2.2 lakh crore for FY26. The policy shift expands the addressable market for listed companies and pushes them closer to full-scale manufacturing.

Zen Technologies Enters ‘Hard-Kill’ Segment

Zen Technologies received an arms manufacturing licence under the Arms Act, 1959. The licence allows it to produce 12.7mm, 23mm, 30mm and 40mm cannons.

These systems are used in air defence, naval operations and counter-drone roles. The company already builds remote-controlled weapon platforms compatible with these calibres. The licence now enables end-to-end manufacturing.

At 10:36 am, Zen Technologies shares were trading at ₹1,507.10 a piece on the National Stock Exchange (NSE).

Capacity And Order Visibility

Zen Technologies has guided for an execution capability of around ₹4,000 crore over FY27–FY28, supported by ongoing capacity expansion. The company expects its order book to scale up to ₹2,500–3,000 crore by FY27, compared with the current order book of ₹1,336 crore.

Exports remain a key focus. The company aims to derive 20–30% of its revenue from overseas markets by FY28. Management has indicated plans to use the European Union (EU) as a base to serve North Atlantic Treaty Organisation (NATO) countries.

In FY26, the company reported revenue of ₹688 crore, down 29% year-on-year. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) stood at ₹333 crore, declining 23% from the previous year, while margins improved by 400 basis points to 48.4%. Net profit came in at ₹193 crore, marking a 31% drop compared to last year.

Apollo Micro Systems Expands Into Full-Stack Manufacturing

Apollo Micro Systems has received a lifetime arms manufacturing licence from the Department for Promotion of Industry and Internal Trade. The licence permits production of missiles, torpedoes, aerial bombs, rockets and loitering munitions.

The company can now manufacture, assemble and test complete weapon systems at its Hyderabad facilities.

At 10:36 am, Apollo Micro Systems shares were trading at ₹303.85 a piece on the NSE.

A key part of its strategy is the ₹107 crore acquisition of IDL Explosives. This adds capabilities in explosives, propellants and detonators to its existing strength in electronics and guidance systems.

Operational Scale And Presence

Operational scale and presence remain strong for the company, with participation in over 150 indigenous defence programmes. It supplies around 60% of the electronics used in missile systems. The company also has an existing order book of ₹1,305 crore.

The company is also expanding its capacity significantly. Its new Unit-3 facility in Hyderabad spans 350,000 sq ft. It will house assembly lines and testing infrastructure for large-scale production. Management has guided for revenue growth of a 45–50% compound annual growth rate (CAGR) over the next 2–3 years, driven by bulk manufacturing and existing orders.

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Policy Shift Expands Market Size

The opening up of missile and ammunition production marks a structural shift in India’s defence manufacturing landscape. Private companies are now moving beyond supply chains into system-level execution. The recent licences signal early implementation of this policy.

Sources:

Financial Express

Business Standard