Builds guns (towed, self-propelled, mounted), armoured and protected vehicles and the overhauls that keep older tanks and infantry vehicles running. Private firms now win as prime contractors here, often with a foreign design partner.
Why it matters
The Army's artillery plan has been decades late (by Mar 2022 only 17% of guns planned since 1999 had reached contract, per published audit analysis), so the backlog is large. Private primes have broken in: L&T's 100 extra K9 Vajra-T guns (₹7,629 Cr, Dec 2024) and the ATAGS order shared by Bharat Forge (60%) and Tata Advanced Systems.
Where the value pool sits
Large, multi-year programmes worth several thousand crore each, executed over 3-5 years. Margins are moderate; the value is in the long production runs and export follow-ons (Bharat Forge already exports artillery).
Key drivers
Artillery and mechanised-forces modernisation backlog
Buy (Indian-IDDM) preference for Indian-designed guns
Export demand for 155 mm guns and shells
Potential bottlenecks
Very long trials (multiple seasons, desert and high altitude)
Engines, transmissions and some fire-control parts imported
Approval steps after trials (e.g. ATAGS conversion approvals) delay revenue
Investor metrics to watch
Defence order book and conversion to revenue
Defence segment margin (KSSL EBITDA margin 17.2% in Q1 FY27)