Spacetech, Drones, and Robotics: Five Indian Stocks to Watch

For much of modern investing history, when people said, 'Indian tech' they meant service contracts, not satellites or robots.

But this is changing. The country that once exported coders is now starting to build machines that think, fly, and orbit.

That change has been helped along by a steady government hand pushing self-reliance, a growing defense budget, and a new class of engineers who prefer circuit boards to codebases.

For long-term investors, this may be the early innings of a quiet transformation, from services to systems, from contracts to creation.

Let's look at five companies that are part of this shift.

#1 Hindustan Aeronautics Ltd (HAL): The Indisputable Spacetech & Defence Anchor

HAL has been around longer than most of the companies we talk about today.

It designs and manufactures India's military aircraft and helicopters and keeps them flying. When the Indian Air Force or Navy needs a jet or rotorcraft, HAL is usually the one that delivers.

The Deep Tech Angle

HAL is the backbone behind India's most advanced aviation platforms like the Tejas Mk1A fighter jet, the Prachand Light Combat Helicopter, and the Dhruv utility helicopter.

It's also lending its engineering muscle to ISRO's Gaganyaan mission, building the crew module that will carry Indian astronauts into space.

Why it's a Stock to Watch

• Massive Order Book: For investors, visibility matters. HAL's order book, at roughly Rs 1.9 trillion (tn) as of March 2025, represents years of guaranteed revenue. There's talk that new government approvals could lift that figure closer to Rs 2.7 tn. That's the kind of backlog that lets management plan long term and shareholders sleep easy.
• The "ROH" Moat: When you build a plane, you earn once. When you maintain it for 30 years, you earn for life. HAL's Repair & Overhaul (ROH) division is the equivalent of a subscription business. Every aircraft the company has built needs regular service, and no one else is authorised to do it. That means predictable, high-margin income for decades.

When you combine the stability of its ROH business with the growth prospects from India's defence modernisation, you get something rare, a government enterprise that compounds value over time. Investors looking for dependable long-term growth could do worse than keeping HAL on their radar.

#2 Data Patterns (India) Ltd: The "Brains" of Defence & Space

Data Patterns designs and manufactures high-reliability electronic systems for defence and aerospace. Unlike most component suppliers, it develops complete systems in-house, from design to production.

The Deep Tech Angle

Its products form the electronic core of India's defence and space programs. Key examples are radars, electronic warfare suites, avionics for the Tejas aircraft, and control systems used in ISRO's launch vehicles and satellites.

The company also supplies subsystems for the BrahMos missile.

Why it's a Stock to Watch

• High-Margin Niche: By keeping design and manufacturing under one roof, the company protects its intellectual property and maintains strong cost control. This model has consistently produced operating margins near 40%, well above most peers in the defence electronics space.
• Locked-In Partner: Data Patterns' systems are embedded in long-term programs run by DRDO and ISRO. Once integrated, replacement is unlikely. Its order book stood at Rs 10.79 bn in Q1 FY26, giving it steady visibility for future revenue.

Data Patterns earns its edge by keeping design and manufacturing under one roof. That focus helps maintain high margins and dependable quality.

Its long relationship with DRDO and ISRO gives it steady orders and deep credibility. It operates in a narrow but valuable corner of defence electronics, one that rewards precision and reliability more than scale.

#3 ideaForge Technology: Early Leader in Indian Defence Drones

ideaForge designs and manufactures unmanned aerial vehicles for surveillance, mapping, and security applications. The company focuses on professional-grade drones used by defence and law enforcement agencies.

The Deep Tech Angle

Its drones are built for mission-critical use and operate in difficult terrain.

The company develops its own flight control software and autopilot systems, which form a significant part of its intellectual property.

Why it's a Stock to Watch

• Defence and Security Market Position: ideaForge supplies surveillance drones to the Indian Army and several state police forces. With defence budgets rising and more focus on border and internal security, these relationships give it a opening to win follow-on orders.
• Pure-Play Exposure to Indian Drone Manufacturing: Unlike diversified defence players, ideaForge offers direct exposure to the domestic drone industry. The company reported an order book of about Rs 1.45 bn in Q1 FY26, indicating steady demand in its core segments.

ideaForge is still in the early stages of its journey, operating in a young industry backed by strong policy support. The company's technical lead and customer base within defence and law enforcement give it credibility and room to grow.

The industry is still young, but ideaForge's first-mover advantage and proven designs make it a way to participate in the country's growing drone ecosystem.

#4 ABB India: Automation at the Core of Modern Manufacturing

ABB India provides technology and automation solutions for manufacturing, electrification, and industrial operations. It offers products ranging from robotics and motion systems to process automation and digital control solutions.

The Deep Tech Angle

Its Robotics and Discrete Automation division develops industrial robots, collaborative robots, and software that enable smart, automated production lines. These solutions are central to India's ongoing transition toward advanced, data-driven manufacturing.

Why it's a Stock to Watch

• Manufacturing Modernisation: ABB makes the equipment that helps factories run smoothly. Motors, drives, and robotic arms form a large part of its business. Many Indian manufacturers are now automating their production lines, and ABB's products are part of that shift.
• Local Investment and Expansion: The company has been adding to its local capacity. It recently expanded its Bengaluru plant for variable speed drives by about one quarter. The idea is to produce in India for Indian customers. That fits neatly with the country's manufacturing push and shortens delivery timelines.

As Indian manufacturers invest to cut costs and improve quality, ABB is likely to see steady demand. Its ongoing expansion in Bengaluru shows confidence in the local market and keeps it close to its customers. It's a practical play on India's shift toward automated manufacturing.

#5 Tata Elxsi: Engineering the Software Behind Automation

Tata Elxsi earns most of its revenue by designing the software that runs inside vehicles, medical equipment, and connected devices. Its edge comes from years of experience with embedded systems and practical uses of AI.

The Deep Tech Angle

The company develops advanced driver assistance systems (ADAS), autonomous driving platforms under the "AUTONOMAI" brand, and electric vehicle software. It also collaborates with semiconductor and hardware partners to integrate AI-driven mobility and automation solutions.

Why it's a Stock to Watch

• Domain-Specific Expertise: Tata Elxsi's engineers work directly with R&D teams at leading global carmakers. Its specialisation in automotive software gives it a strong position as vehicles increasingly depend on code for safety, performance, and connectivity.
• Positioned for the Software-Defined Vehicle Trend: The future of automotive design is moving from mechanical to digital. Tata Elxsi's focus on software platforms for electric and autonomous vehicles places it at the center of that transition. Partnerships with firms like Infineon and Synopsys reinforce its role in shaping next-generation mobility systems.

Tata Elxsi focuses on engineering software for vehicles and connected devices. Its teams work alongside global automakers to design advanced driver systems and electric-vehicle software.

Its strength lies in long-term technical partnerships rather than one-off contracts, which gives it steady growth potential as transportation continues to become more software driven.

Should You Consider India's Deep Tech Stocks?

India's tech landscape is starting to look different. It is no longer just about software exports or IT services. HAL, Data Patterns, ideaForge, ABB India, and Tata Elxsi are part of a group that designs real hardware and automation systems built for factories, defence, and space.

Each serves a distinct part of the value chain: HAL builds aircraft, Data Patterns builds the electronics inside them, ideaForge supplies drones for defence and security, ABB India automates production, and Tata Elxsi provides the software intelligence behind advanced systems.

Together, they reflect a structural shift from outsourcing to ownership from renting out talent to creating technology. For long-term investors, this transition offers a way to participate in India's next decade of industrial and defence modernisation.

However, careful analysis of company fundamentals, regulatory environment, and sector trends is essential before investing.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...