DPSU Turnover Rises 15.4% to ₹1.29 Lakh Crore

Key takeaways

• Defence public sector undertakings recorded combined FY2025-26 turnover of ₹1.29 lakh crore, up 15.4%, according to the Ministry of Defence.
• Combined profit after tax rose 15.6% to ₹23,136 crore, while exports increased 151.2% year on year.
• The export acceleration is strategically more important than turnover alone because it tests whether Indian systems can compete, receive certification and sustain support abroad.
• The next test is whether higher sales translate into on-time deliveries, deeper indigenous supply chains, new technology and repeat export orders.

India’s defence public sector undertakings generated turnover of ₹1.29 lakh crore in FY2025-26, a 15.4% increase from the previous year, the Ministry of Defence said ahead of its annual performance review on 1 September 2026. The 16 state-owned defence companies also earned combined profit after tax of ₹23,136 crore, up 15.6%, and lifted exports by 151.2%.

The figures show more than a larger order book. They suggest that India’s public defence manufacturers are delivering more aircraft, electronics, missiles, ships, vehicles and materials while trying to move from a protected domestic supplier base toward an export-capable industrial system.

Everyone else is reporting ₹1.29 lakh crore; we are explaining why export growth, delivery discipline and indigenisation determine whether the turnover becomes lasting capability.

What defence public sector undertakings are

Defence public sector undertakings, commonly called DPSUs, are government-controlled companies that design, produce, repair or support military equipment. Their products range from combat aircraft and helicopters to radar, missiles, warships, armoured vehicles, earth-moving machinery and special alloys.

The group includes Hindustan Aeronautics Ltd (HAL), Bharat Electronics Ltd (BEL), Bharat Dynamics Ltd (BDL), Mazagon Dock Shipbuilders Ltd (MDL), Garden Reach Shipbuilders & Engineers Ltd (GRSE), Goa Shipyard Ltd, BEML and Mishra Dhatu Nigam Ltd (MIDHANI), alongside the newer companies created from the corporatisation of the former Ordnance Factory Board.

Turnover is the value of sales recognised during the financial year. It is not the same as new orders received, cash collected or the total value of an order book. Defence contracts can take years to execute, so annual revenue depends on production milestones, customer acceptance and delivery schedules.

How large was the underlying increase?

If ₹1.29 lakh crore represents a 15.4% rise, the previous year’s comparable turnover was roughly ₹1.12 lakh crore. That implies an increase of about ₹17,200 crore. The estimate is derived from the ministry’s rounded headline figures, so it should not be treated as an audited rupee-exact total.

Measure	FY2025-26	YoY change	Why it matters
Combined DPSU turnover	₹1.29 lakh crore	+15.4%	Shows the scale of delivered and recognised sales
Combined profit after tax	₹23,136 crore	+15.6%	Indicates earnings broadly kept pace with revenue
Exports	Amount not disclosed in the release	+151.2%	Signals faster international expansion from the prior-year base
DPSUs reviewed	16 companies	Not applicable	Covers aviation, electronics, missiles, shipbuilding, vehicles and materials

The profit growth is notable because it almost matches turnover growth. That suggests aggregate net margins were broadly stable. Using the headline totals, combined profit after tax equalled about 17.9% of turnover. However, that is a simple group ratio; it should not be applied to every company because product mix, milestone timing and accounting differ widely.

Why exports are the most important signal

A 151.2% export increase is far faster than the rise in domestic turnover. The ministry did not provide an aggregate export amount in its 31 August preview, so readers should avoid converting the percentage into an invented rupee figure. Even so, the direction is strategically meaningful.

Exports require more than surplus factory capacity. A buyer must evaluate performance, price, financing, training, ammunition or spare availability, maintenance support and political risk. Platforms may also need country-specific integration and certification. Winning an order therefore demonstrates capability across the product and support chain.

Repeat orders matter even more. A one-time shipment can create a high growth rate from a small base; sustained exports require reliability over years. Lapaas Voice’s overview of India’s defence and maritime push explains how missile exports, shipbuilding and defence company dividends fit into the wider strategy.

Where the turnover is coming from

India’s armed forces remain the anchor customers. Large domestic programmes include combat aircraft, helicopters, radar networks, missiles, naval vessels, armoured and support vehicles, ammunition and maintenance. Revenue is recognised as companies complete contracted milestones and deliver accepted equipment.

HAL is central because aerospace programmes are large and technically complex. Our report on HAL’s Q1 FY27 results noted an order book of about ₹2.54 lakh crore at March 2026, providing long execution visibility. Yet that visibility also creates pressure to manage engines, avionics, vendors and testing schedules.

BEL supplies radars, communications, electronic warfare and other systems; BDL manufactures missile systems; MDL, GRSE and Goa Shipyard build naval platforms; BEML makes defence and heavy equipment; and MIDHANI supplies specialised alloys. Their products connect, which means delays at one supplier can affect a larger platform.

The difference between production and indigenisation

Higher domestic production does not automatically mean every critical component is Indian. A platform assembled in India may still depend on imported engines, seekers, chips, sensors, machine tools or specialised materials. Genuine indigenisation increases the domestic share of design, intellectual property, components and lifecycle support.

The annual review’s focus on new indigenous technologies is therefore important. Defence Minister Rajnath Singh was scheduled to release an Aatmanirbhar DPSU publication, a DISHA student initiative, and HAL modernisation and indigenisation road maps. Those documents connect financial performance with the technology pipeline.

Private suppliers also matter. DPSUs rely on thousands of micro, small and medium enterprises for machining, electronics, software, composites and services. A stable order pipeline can help vendors invest in quality systems and capacity, but late specifications or uneven orders can leave them carrying expensive idle assets.

Lapaas Voice’s analysis of the Mahindra Aerostructures–Airbus contract illustrates how repeated, certified manufacturing work deepens aerospace skills. Although that is a civil aviation supply deal rather than a DPSU programme, the capability-building mechanism is similar.

What the annual review should test

Turnover and profit are necessary performance measures, but they are not sufficient for defence readiness. The review should examine schedule adherence, quality escapes, warranty performance, inventory, working capital, indigenous content, research milestones and user feedback.

Seven DPSU chiefs—HAL, MDL, BEL, BDL, GRSE, BEML and MIDHANI—were due to present dividend cheques representing the government’s equity share for FY2025-26. Dividends return cash to the owner, but boards must balance payouts with the capital required for new plants, testing infrastructure and research.

Modernisation is particularly urgent where legacy production systems create bottlenecks. Digital design, automated inspection, additive manufacturing, simulation and secure supplier data can shorten development cycles. Yet technology spending should be judged by actual throughput and quality, not the number of tools purchased.

How defence FDI could change the picture

India is separately considering easier foreign investment rules for defence manufacturing, although no final change had been notified by 31 August. Our report on India’s defence FDI consultation explains the current framework and why policymakers want more capital and technology.

Foreign partners can help with engines, electronics, materials and global sales channels. However, a joint venture creates durable capability only when engineering responsibility, supplier development and intellectual property move deeper into India. Simple assembly can lift near-term turnover without eliminating strategic dependence.

What investors and suppliers should watch

For investors, the first signal is order conversion. A large order book is valuable only when production, testing and customer acceptance occur on schedule. The second signal is cash conversion: receivables and inventory can rise even when accounting profit looks healthy.

For suppliers, visibility matters. Multi-year schedules allow investment in machines, tooling and training. However, concentration in one DPSU or programme creates risk if specifications change or deliveries slip. Vendors should look for programme diversity and clear quality requirements.

For policy makers, the most revealing measure is repeatable export performance. A 151.2% rise is impressive but comes from an undisclosed base. Future releases should provide the export amount, product mix, destination diversity and repeat-order share so readers can judge durability.

The bottom line

The FY2025-26 numbers show a healthy public defence manufacturing system: turnover and profit increased at similar rates, and exports accelerated dramatically. The official PIB release provides the primary figures; Defence Standard independently reported the same totals and review agenda.

The next stage is harder. Defence public sector undertakings must turn revenue into faster delivery, indigenous technology, resilient suppliers and long-term overseas support. If those operational gains follow the financial gains, ₹1.29 lakh crore will represent more than sales—it will represent a stronger industrial base.

FAQs

What is DPSU turnover?

DPSU turnover is the combined sales recognised by India’s government-controlled defence manufacturers during a financial year. It is different from their order books and cash collections.

How much did defence public sector undertakings earn in FY2025-26?

The 16 DPSUs recorded combined turnover of ₹1.29 lakh crore and profit after tax of ₹23,136 crore, according to the Ministry of Defence.

How fast did DPSU exports grow?

The Ministry of Defence said exports rose 151.2% year on year. Its preview release did not disclose the aggregate export amount, so the percentage should not be converted into an assumed rupee value.

Why does indigenisation matter?

Indigenisation keeps more design, component manufacturing, intellectual property and lifecycle support in India, reducing dependence on foreign suppliers for critical systems.

Sources: Press Information Bureau / Ministry of Defence release; Defence Standard’s independent report; Ministry of Defence.