DPSUs post profits; R&D and exports remain weak

Only three of India's 16 public sector arms manufacturers meet global benchmarks

3 min read

Updated On: Jun 10 2026 | 7:33 AM IST

A T-90 (Bhishma) Tank at DefExpo 2020 in Lucknow (Photo: Ministry of Defence)

Indian defence public sector undertakings (DPSUs) — both the traditional firms, marked “old” in official communications, and those created through the corporatisation of the Ordnance Factory Board, marked “new” — continue, with a few exceptions, either to post rising profits or at least remain in the black. Their spending on research and development (R&D) and export performance, however, remain muted, even as India pushes self-reliance (Aatmanirbharta) in defence and seeks a larger share of the global arms trade.

These trends are reflected in the data presented by the Standing Committee on Defence in the Parliament in March.

Among the nine old DPSUs, all but Mishra Dhatu Nigam Limited (MIDHANI) grew their profits between FY22 and FY25.

Over this period, Hindustan Aeronautics Limited (HAL) recorded the highest absolute increase in profits, rising by ~3,230 crore from ~5,087 crore to ~8,317 crore. Hindustan Shipyard Limited (HSL), meanwhile, posted the highest percentage growth, with profits rising by about 318 per cent from ~51 crore to ~213 crore. In FY26 — for which data for most companies was available only up to the third quarter — BEML Limited was the only company to report a net loss.

Market radar: April 22, 2026 to May 22, 2026

Among the seven new DPSUs formed in 2021, all but Troops Comforts Limited (TCL) were profitable in FY25. Between FY22 and FY25, Munitions India Limited (MIL) recorded both the highest absolute increase in profits and the highest percentage growth among the new DPSUs that were already profitable at the start of the period.

The FY26 data — available only up to the end of January — showed that the five companies for which figures were available, excluding Advanced Weapons & Equipment India Limited (AWEIL) and TCL, all remained in the black and were largely on course either to grow or at least maintain their profits from the previous financial year.

A 2024 report published by the Foundation for Advancing Science and Technology India, in collaboration with IIFL Securities, found that the median R&D intensity — measured as the ratio of a firm’s R&D expenditure to revenue — among major global defence companies stood at 3.4 per cent.

An analysis of data presented by the Standing Committee on Defence shows that in FY25, only HAL (8.2 per cent), Bharat Dynamics Limited (6.7 per cent) and Bharat Electronics Limited (6.4 per cent) among the old DPSUs — and none among the new DPSUs — exceeded the global median.

Coming to exports, DPSUs have for years lagged behind their private-sector peers despite accounting for a much larger share of domestic defence production. The trend was again visible in data presented by the Standing Committee on Defence, which showed that in FY25, apart from BDL (38 per cent), MIDHANI (8.7 per cent), and BEML (7.4 per cent) among the old DPSUs, and MIL (37.4 per cent) and Yantra India Limited (10.3 per cent) among the new, exports accounted for only an insignificant share of turnover for most companies.

This trend will have to be reversed if the country is to achieve its goal of greater self-reliance in defence.

Old DPSUs post profit growth, with a few exceptions (Profit after tax in ₹ cr)

Old DPSUs

Less than half of old DPSUs focus on R&D Figures represent R&D expenditure as a percentage of total turnover

DPSUs on R&D

New DPSUs

Only a handful of new DPSUs do well in exports

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Written By :

Bhaswar Kumar

Bhaswar Kumar has over seven years of experience in journalism. He has written on India Inc, corporate governance, government policy, and economic data. Currently, he covers defence, security and geopolitics, focusing on defence procurement policies, defence and aerospace majors, and developments in India’s neighbourhood.