L&T eyes $1 billion defence milestone as conglomerates power ahead

“Defence is an important sector for L&T and we have grown our operations to $1 billion this fiscal,” said Arun T Ramchandani, senior vice president and head of precision engineering and systems at L&T. “Our goal in the long term is to grow this business further to make a more significant contribution to the group business.”

“We see 95% of our defense revenue coming from India and we are working on multiple projects, including trials of a light tank for the Indian Army. We are also working on air defense system trials for the Air Force and expect defense to be a key vertical going forward,” he said.

L&T’s growth in the business reflects the government’s increasing focus on defense modernization. The country spent $80 billion on defense equipment last year, according to Goldman Sachs, making it the world’s fifth-largest spender and second-largest importer after Ukraine. The government has also increased demand for domestic suppliers by making it mandatory to source three-quarters of annual defense purchases locally, up from 68% by 2022.

to 1 billion dollars (about ₹8,800 crore) In the defense business, only three local companies will be larger than L&T in the defense sector: Hindustan Aeronautics Ltd (HAL) noted ₹Revenue of ₹30,980.9 crore was generated last year; With Bharat Electronics Ltd (BEL) ₹23,658 crore; and with Mazagon Dock Shipbuilders Ltd ₹11,431.9 crore.

Overall, L&T was created ₹1,31,662 crore ($14.9 billion) from seven business lines in the first six months of the financial year. Infrastructure accounts for around 46%, followed by IT and energy projects with around 20% each. The remaining 14% came from other sectors, including high-tech manufacturing, financial services, development projects and real estate.

Defense is part of precision engineering and systems within high-tech manufacturing and ₹6,060 crore last year. In the first six months of the current fiscal year, Precision Engineering and Systems’ revenue increased by 53% compared to the previous year. ₹3,760 crore.

Budget increase

India in 2025-26 budget ₹6.81 lakh crore for the defense sector, an increase of 9.53% over the previous year. The country is expected to spend $130 billion on defense modernization in the next seven years, according to Adani Enterprises’ annual report.

Last month the defense minister Rajnath Singh also announced a revised procurement guideline stating that the three defense forces can procure worth of defense equipment along with other ministry of defense (MoD) agencies. ₹1 trillion from domestic companies.

“The defensive posture has now shifted from reactive to proactive, driven by secure domestic systems and more powerful deterrence platforms (aircraft defense and counter-drone systems). The nature of the industry has changed from a public sector monopoly to an ecosystem that includes private companies, start-ups, academia and global partnerships,” Goldman Sachs analysts Amit Dixit and Kumari Rishika wrote in an Oct. 2 note. “In fact, India’s defense exports have crossed INR 236 billion (US$ 2.8 billion) in FY25, from just INR 6.8 billion (US$ 80 million) in FY 2014.”

Conglomerates, a dozen public sector defense organizations and more than two dozen small listed firms will benefit from the localization drive. Tata Group, Adani Group and Mahindra and Mahindra as well as state-owned HAL, BEL and Mazagon Dock saw an increase in defense revenues.

HAL does While it produces warplanes, jet engines and helicopters, Bharat Electronics produces radars and weapon systems. Bharat Dynamics produces missiles and ammunition. Mazagon Dock Shipbuilders is the nation’s largest naval shipyard.

Tata Advanced Systems, privately owned by Tata Group, reported revenue of: ₹5,176 crore in the last financial year. Adani Defense Systems and Technologies Ltd, the wholly-owned subsidiary of billionaire Gautam Adani’s flagship Adani Enterprises Ltd, reported ₹2,007 crore revenue; Mahindra and Mahindra Defense Systems, a wholly owned subsidiary of Mahindra, ₹960.17 crore in FY25.

However, experts suggest that companies should not rely solely on orders from the Indian government.

““R&D investments will lead to the creation of products and with this, companies should explore export opportunities that will appeal to specific countries,” said Shailender Arya, senior advisor at The Asia Group, a Washington-based business advisory group. “This will reduce their dependence on the Indian government, where demand may not be uniform, and all this can turn defense into important business verticals for conglomerates with deep capabilities across industries.”