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Scales Defence Play Amid India’s Localization Push and Capex Surge

is set to cross $1 billion in defence revenue this fiscal, cementing its position as India’s largest private military equipment supplier and fourth overall. With 95% of its defence business sourced domestically, the company is riding the wave of India’s aggressive localization and modernization drive. - Crossing the $1 Billion Mark in Defence Revenue L&T expects its defence business to hit $1 billion (₹8,300 crore) in FY26, making it the fourth-largest defence supplier in India after HAL, BEL, and Mazagon Dock. This milestone reflects the company’s scale-up in precision engineering and systems, which saw 53% YoY revenue growth in H1FY26. - Strong Domestic Focus and Strategic Trials Underway About 95% of L&T’s defence revenue comes from Indian contracts. The company is conducting trials for a light tank for the Army and an air defence system for the Air Force. These projects align with India’s push for indigenous platforms and stronger deterrence capabilities. - Government Capex and Policy Tailwinds Fuel Growth India allocated ₹6.81 trillion for defence in FY26, with ₹1.52 lakh crore earmarked for domestic procurement. A revamped procurement manual now allows MoD agencies to source ₹1 trillion worth of equipment from Indian firms, creating a robust pipeline for private players like L&T. - Sector Evolution Favors Private Participation The defence ecosystem has shifted from public-sector monopoly to a diversified landscape involving private firms, startups, academia, and global partnerships. India’s defence exports surged to ₹23,600 crore in FY25 from ₹680 crore in FY14, reflecting broader sectoral momentum. L&T competes with Tata, Adani, and Mahindra in the private defence space. With ₹31,662 crore in total revenue across seven segments, L&T aims to deepen its defence footprint, leveraging its engineering capabilities and growing relevance in strategic platforms.