Premier Explosives aims to grow on defence orders

The company has been supplying solid fuel castes to DRDO for Agni and other surface-to-air missile systems for the past 3 years

Metal and mineral extraction activity is likely to cease to be the sole driver of business growth for some private industrial explosives manufacturers in India as they seek bigger a opportunity from the defence sector over the next 4-5 years.

"We expect defence orders to comprise 80% of our revenues in five years from now, compared to around 30% today," TV Chowdary, deputy managing director of Hyderabad-based Premier Explosives, told Business Standard.

Granted licence to manufacture rocket propellants in 2001, the company has been supplying solid fuel castes to the Defence Research and Development Organisation (DRDO) for Agni and other surface-to-air missile systems for the past 3 years.

This pie would become bigger as the new missiles such as LRSAM, MRSAM and Astra, which have reached the final testing stages, are expected to enter production mode in the next 1-2 years, according to Chowdary.

The Centre’s idea to consider export prospects available for the indigenously produced missile systems would further enhance the scope for defence orders to such companies.

A relatively smaller player, Premier Explosives aims to reach revenue size of Rs 600-800 crore in the next five years from Rs 184 crore in 2015-16. For the current year, the company is targeting to achieve Rs 230 crore revenue.

Currently, growth of industrial explosives business in India is linked to the mining activity with Coal India driving most of the demand for these materials. 

However, bigger players such as Nagpur-based Solar Explosives are also entering the defence segment as the Government of India is encouraging private sector participation in defence sector through multiple initiatives, including Defence Offset and Make in India programmes.

Last year, Solar had received licence to produce rocket propellants, RDX and RDX compounded products, among other materials.

On Saturday, Premier Explosives delivered the 1000th Akash Missile Booster Grain to Hyderabad-based Bharat Dynamics, the last one of the order. Premier is the only private sector player to bag this contract while the other order was given to government-owned Ordnance factory in Itarsi. Booster grain is the solid fuel caste in cylindrical shape that gives the initial thrust in propelling missiles. Besides this, it was also in the process of delivering the Sustainer Grain for 500 Akash missiles. Sustainer grain provides the momentum to missiles till it reaches the target. 
 

The company is also planning to enter the ammunition segment, including warheads, according to the company official.