In 2023, India’s commercial drone industry didn’t just grow; it soared, nearly doubling its fleet with registrations rocketing from 4,972 to 9,842 on the DGCA’s DigitalSky platform — an astonishing 98% increase.
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Did a small write on Paras Defence - Betting on Space [Part 3]: Paras Defence talking about the business, pros and cons.
PE of 84 looks high, defence stocks have been extremely hot.
- I would like to see more drone business flowing to the company.
- The company talks about EMP protection solution, but I am not sure how much $$ they’re generated from this. It has applications in Defence, Space, Banking, etc.
- Return ratios, operating margins, revenue growth CAGR - would like to see all these 3 metrics grow
Waiting for a correction, to buy into this company.
Dronacharya is into drone training.
New Heights in New Year: India Witnesses Record Drone Registrations in January 2024, Agriculture Sector Takes Flight
(John Mathai - IHS Markit | LinkedIn)
February 3, 2024
The start of 2024 has witnessed an unprecedented rise in the registrations of commercial drones in India. The Digital Sky platform, managed by the industry regulator Directorate General of Civil Aviation (DGCA), reported a 62% increase in January 2024 compared to January 2023. This growth marks a vibrant uptick from the last quarter and indicates a sequential monthly growth of 6.4% over December 2023. This trend signifies a robust and expanding commercial drone market, with the agricultural sector leading the charge.
Source: DigitalSky, DGCA *Jan22 registrations are negligible
The significant increase is largely attributed to a series of strategic government incentives at the Central and state government levels, coupled with significant orders from the farmers’ cooperative IFFCO, which have catalyzed the market. New registrations in the medium and small-category drones, as defined by the DGCA, are mostly agricultural sprayer drones, a direct response to the incentives. Conversely, registrations in micro-class drones have declined.
“Make in India” Initiative and Drone Imports
A closer examination of drone models registered in January 2024 reveals a marked commercial orientation. The “Make in India” initiative has significantly influenced the domestic production of drones, especially in the agricultural sector. With the February 2022 ban on drone imports, there has been a noticeable shift towards domestically produced drones, with 77% of new registrations being domestic models. Despite the ban, imported drones, particularly those from Chinese manufacturer, DJI, continue to fill a niche in the market, representing the remaining registrations and indicating a sustained demand for advanced, compact drones for non-agricultural applications.
Drone Application Segmentation
The segmentation of drone applications based on origin and size demonstrates a strategic divergence. Domestically produced drones, which dominate the small and medium categories, are predominantly agricultural spraying models. This reflects a direct response to government policy incentives, with no imported models in the medium category and only 3% in the small category. Conversely, the import dominance in the micro and nano categories of drones highlights a marked preference for compact, versatile drones suited for aerial photography, asset inspections, surveys, and surveillance tasks.
Source: DigitalSky, DGCA
Market Concentration
Drone registrations in January also reveal a notable concentration among India’s top domestic manufacturers, particularly in the agriculture segment. The top five Unique Identification Number (UIN) owners accounted for 61% of all drone registrations, with Daksha Unmanned Private Systems leading the pack at 29%. This dominance by a few key players underscores the significant influence they hold in the agricultural drone market as early entrants and their ability to benefit from large deals like the IFFCO tender.
Source: DigitalSky, DGCA
Drones as Innovation Platforms
The recent acquisition of Daksha by Coromandel International Limited, a front-runner in the fertilizer industry, exemplifies a strategic trend where fertilizer companies are forging partnerships with drone enterprises. This collaboration underscores a deliberate move to utilize drones as innovative platforms for the introduction of new products. The deployment of nanotechnology-based fertilizers, notably Nano Urea and Nano DAP, serves as a prime example of this strategy.
These advanced fertilizers, which necessitate foliar application, are perfectly suited for drone deployment, thereby enhancing the efficiency and effectiveness of nutrient delivery to crops. These innovative products are designed to address the widespread challenge of nutrient deficiencies in Indian soils, marking a significant milestone in agricultural productivity. By reportedly enhancing crop yields for farmers and generating higher profit margins for fertilizer companies without relying on government subsidies, these solutions set a new standard distinct from traditional fertilizers. This strategy exemplifies the immense potential of integrating drone technology within agricultural practices, indicating a pivotal transformation within the sector.
Summary
The upsurge in India’s commercial drone registrations continued into January 2024 underpinned by strategic governmental policies, the impactful “Make in India” campaign, and an industry-wide shift towards domestic production. This expansion is particularly pronounced in the agricultural spraying domain, where drones are becoming indispensable tools for enhancing productivity. The leadership of domestic manufacturers, and their alignment with agricultural solution companies to introduce products like Nano Urea and Nano DAP, spotlight the sector’s potential to revolutionize farming practices in India.
The Indian drone industry, with its diverse ecosystem of over 200 companies and start-ups, is experiencing a phase of dynamic growth and integration into the broader economic landscape. The implications of this growth extend far beyond the agricultural sector, touching upon various domains where drones can add value, from logistics and surveillance to disaster management and urban planning. As drones become increasingly embedded in India’s economic activities, their potential to streamline operations, enhance efficiency, and open up new avenues for services is unparalleled, promising an exciting era of development and prosperity.
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Ideaforge proudly calls itself the largest drone company.
But, Ideaforge is nowhere in the top5 in January2024 registrations.
While Dhaksha had a turnover of less than 5cr in 2022, this coromandel (Murugappa) based company has bagged a 165cr order for 600drones worth 165cr from defence (200pcs) and agri (400pcs) sectors. This is equivalent to last years sale of Ideaforge.
Ideaforge backed by Infosys has had a bad q2 But they are banking on drone Exports the the USA post receipt of license. But, no news on orders received by the company in the last quarter. Surprisingly, Carborundum Universal, another Murugappa group company has tied up with Ideaforge.
Another Listed major Paras Defence has also bagged a huge drone contract from IFFCO and also has existing business with the Defence sector.
Also, Paras order for 400drones is worth 42.4crores. This means Dhaksha order for agri drones has to be of around similar value. This puts the 200 defence drones order at 100-125crores.
with hardly a 1000 units of drones sold the rankings will fillip faster every month.
Update: Idea forge announced its results yesterday where it claimed to be 5th ranked globally for drones.(up 2 places).
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Ideaforge proudly calls itself the largest drone company.
But, Ideaforge is nowhere in the top5 in January2024 registrations.
Lets understand this better:
Almost 70% of Ideaforge revenue is from defence related business, which is not registered for UINs.
Second, If i were to purchase a drone, like DJI and register it, it would show me as the owner not DJI.
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Hi. Could you give the list of these top 5 companies?
Not sure about the top 5 companies, sir but maybe you could take some time to study DroneAcharya. I feel the company is taking significant strides towards its growth goals but the stock price is not reacting currently. Maybe a good time to study before it takes off!
Please follow its dedicated thread here on ValuePickr. Once you research and form an opinion about the future outlook/prospects, it’d be great to hear your perspective as well.
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Hi Sir, this was the last update. I stopped following it, since there wasn’t sufficient investor interest. But will look into this once again.
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Most of the players in the drone field are unlisted, it seems. In fact, I have not been able to unearth many in the unlisted space to.
“Can you please briefly expalin how the video you attached above could be related to Mazagon? Thanks”
I am replying here because of concerns about the sanctity of the thread on Mazgaon doc.
Two of the great investors, Charlie Munger and Li Lu have talked of reading and taking lessons from every subject from history to biology.
While drones have uses in areas from agriculture to flood relief, I am confining myself to their defence uses.
To me, the heavy moving weaponary has been exposed in the Ukraine-Russia and Azerbaijan-Armenia. Earlier too, the US forces have used the UAVs in taking out terrorists in Pakistan, Somalia among other places.
Russia is overwhelmingly powerful in comparison to Ukraine. Yet $300 drones have made Russia yield the Black sea.
As for ground attacks, Ukraine war is current so I hardly need emphasise it, but take a look at the Azerbaijan-Armenia war.
"Many accounts of the war describe it as a one-sided, an Azeri drones versus Armenian ground forces event with Azeri ground forces figuratively “riding on the backs” of the drones to victory with a minimum of fighting by them. To quote a typical example:
“Azerbaijan’s UAVs obliterated Armenia’s formidable array of ground-based air defences, after which they systematically decimated Armenia’s ground force matériel, including tanks, artillery pieces, and supply trucks. This onslaught forced Armenia to accept a humiliating ceasefire imposed by Russia.
… It can be said that this was the first postmodern conflict, in that it was the first in which unmanned-aircraft overwhelmed a conventional ground force, grinding it down to the point of impotence and paving the way for the Azeri ground forces to roll in and take possession of a strategic chokepoint.”[i]
The article concludes that it is not entirely due to the drones that Armenia lost. “it is very clear that without the drones the Azeris would not have achieved the success that they did. However, it is just as clear that the drones did not win the war by themselves and did not make the ground battle easy. Given the available data, computing the exact share in victory between drones and ground forces more accurately than that is impossible.”
There is, however, one very important conclusion in the Mazgaon thread that there is no moat in drone manufacture. This is supported by the Ukraine war too, where small workshops are modifying the drones to wage war on Russia.
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Listed Drone companies in India
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Ideaforge Technology Ltd
The company manufactures Unmanned Aircraft Vehicles for Mapping, Security & Surveillance. These drones are capable of a wide range of mining area planning, and mapping applications. -
Paras Defence and Space Technologies Ltd
Company thorough subsidiary, Paras Aerospace has established competencies in a wide range of drone technologies and solutions. It offers holistic solutions including drone manufacturing, management (perimeter surveillance, warehouse inspection, drone safety systems using patented parachute deployment system) and services (agriculture, industrial infrastructure, GIS and engineering and training. -
Drone Destination Ltd
India’s largest Drone Pilot Training, and leading Drone-as-a-Service (DAAS) company, along with its sister concern, Hubblefly Technologies, a DGCA-approved manufacturer, has developed an integrated drone eco-system built around drone manufacturing, certified training, and drone as a service. -
Droneacharya Aerial Innovations Ltd
Droneacharya Aerial Innovations Ltd provides Drone operation training, supply & maintenance services, and management consultancy & training services. -
Vishnusurya Projects and Infra Ltd
The company is into providing integrated solutions of Drones for surveillance, mapping and surveying purposes through collaboration with its group company, Garuda Aerospace. -
RattanIndia Enterprises Ltd
Company through its subsidiary company NeoSky India aims to provide 360-degree service to its clients via Drone-as-a-product and Drone-as-a-service portfolios. Neosky India has entered into an agreement with Throttle Aerospace to acquire 60% stake in it. NeoSky received a Drone pilot training license from DGCA.
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