3 Midcap Drone Stocks to Add to Your Watchlist

The drone industry holds strong growth prospects globally and in India, driven by expanding commercial applications, regulatory maturation, and technological innovation.

India's drone industry could help unlock up to US$ 23 bn in manufacturing potential by 2030, driven by fast-growing demand from sectors such as defence, agriculture, logistics and infrastructure, according to a new report released by Nexgen Exhibitions.

Key Growth Drivers

• Strong government policy support, including liberalized DGCA drone regulations, PLI schemes for local manufacturing, and major initiatives like “Drone Shakti,” is accelerating industry adoption.
• Defence sector remains the biggest consumer, with military drone revenue projected to reach US $4.5 bn (billion) by 2030, growing at a CAGR of nearly 17%.
• Agriculture, precision farming, and crop monitoring are emerging as high-potential growth segments; a large number of drone companies expect agriculture to become the largest consumer of drones by 2030.
• Other high-growth application areas include infrastructure surveying, smart city monitoring, solar and energy sector inspections, healthcare logistics, and digital mapping.

Sector-Wise Impact Table

As the industry grows rapidly, many companies are set to benefit. Three prominent players in the listed midcap space are likely to gain traction as prominent players: Zen Technologies, RattanIndia Enterprises, and Paras Defence and Space Technologies.

These stocks are worth keeping an eye on due to their distinct strategies for growth and their ambitious plans over the next three years, all against the backdrop of a rapidly expanding industry.

Let's explore what the future may hold for them. Please note, this is neither a stock recommendation nor a fundamental analysis.

For the purpose of determining midcap we have taken stocks that have a market cap more than Rs 50 bn to Rs 250 bn. It's also important to note that some of these companies may also be diversified and part of the drone ecosystem.

#1 Zen Technologies

In a time of swift technological advancement and changing security threats, Zen Technologies has made a name for itself in defence technology.

Zen Technologies specialises in land-based force simulation training, creating cutting-edge simulators that let military personnel practise for real-world scenarios in secure environments.

It offers training systems for tanks, cars, artillery, and aircraft, giving the military realistic, affordable, and sustainable substitutes for conventional live drills.

Regarding the drone industry, Zen Technologies' Counter Unmanned Aerial System (CUAS) platform offers a comprehensive anti-drone solution that successfully addresses the increasing security threats posed by unauthorised drone operations.

The multi-layered, multi-sensor architecture of the CUAS is designed to identify, categorise, and eliminate aerial threats.

Advanced radar technologies, state-of-the-art day and nighttime video sensors, and radio frequency analysis work together to provide its strong detection capabilities.

This combined strategy ensures thorough situational awareness in a variety of operational contexts by enabling early-warning detection and reliable tracking of both remotely operated and autonomous drones.

Financial Highlights of Zen Technologies

Source: Equitymaster

The company has reported a superb numbers in the last few years. Revenues have grown at a CAGR of 140.8% in the last three years. Net profits have leaped 385.9% during the same period.

In FY25, Zen Technologies recorded its highest-ever turnover and profitability, driven by strong operational execution and demand across core business areas.

During the year the company made strategic acquisitions in marine simulation, drone propulsion, and AIdriven robotics which further expanded Zen's capabilities, positioning the company as a comprehensive defence technology provider across land, air, and maritime domains.

For the quarter ending September 2025, the company reported revenues of Rs 1,736 m against Rs 2,418 m YoY. Net profits dipped slightly to Rs 620 m from Rs 634 m YoY. It was a subdued performance for Q2 FY26.

Looking ahead, the company expects FY26 to be a more measured year in financial terms, driven largely by the timing of order inflows and execution cycles. The management described this as a natural calibration phase within a broader growth trajectory.

Over the medium term, the company aims for a cumulative revenue of Rs 60,000 m across FY26, FY27, and FY28. This projection underscores confidence in its technological capabilities, the maturity of its pipeline, and the increasing momentum in defence modernisation.

To know more check the Zen Technologies fact sheet and latest quarterly results.

#2 RattanIndia Enterprises

RattanIndia Enterprises is an Indian company primarily focused on technology-driven new-age businesses in high-growth sectors.

Its main areas of operation include e-commerce, electric vehicles, fintech, and drones. The company operates its e-commerce business through its subsidiary Cocoblu Retail and is also engaged in the electric motorcycle segment via its subsidiary Revolt Motors.

NeoSky, the company's pioneering drone vertical, achieved significant milestones in FY25. Through strategic partnerships with the Indian Army (Northern Command), the CRPF, DRDO, and BEL, NeoSky supplies next-generation drone solutions, while expanding deployments across forestry applications in Uttarakhand and at premier academic institutions such as IIT-Kanpur and ISM-Dhanbad.

Leveraging AI and ML, NeoSky helps in crowd monitoring, vehicle detection, number plate recognition, and fire detection.

High-altitude trials with the Indian Army, night surveillance operations with the BSF and deployments at the Maha Kumbh 2025 showcased the versatility and reliability of its platforms.

Financial Highlights of RattanIndia Enterprises

Source: Equitymaster

On the financial front, the company reported revenues in Q2 FY26 of Rs 21,239 m vs 18,006 m YoY. RattanIndia Enterprises reported losses in September 2025.

Moving ahead, Cocoblu Retail is primed for growth, leveraging technology, robust infrastructure, and private brands, partnerships with MSMEs, and licensing deals.

Revolt Motors is also aggressively expanding its dealership network and entry into global markets.

To know more check the RattanIndia Enterprises fact sheet and latest quarterly results.

#3 Paras Defence and Space Technologies

Third on the list is Paras Defence and Space Technologies.

Paras Defence and Space Technologies is an Indian defence and space engineering company specialising in indigenously designed, and manufactured products and solutions.

The company supplies critical components such as submarine periscopes, avionics glass suites for aircraft, and high-performance optical systems including for drones, unmanned aerial vehicles (UAVs), and anti-drone devices.

Paras Defence and Space Technologies is the only Indian company manufacturing electro-optic cameras for drones and UAVs.

On the drones front, Paras Heven Advanced Drones Private Ltd is a newly incorporated subsidiary of Paras Defence and Space Technologies.

This joint venture between Paras Defence (51%) and Israel-based Heven Drones (49%) focuses on logistics and cargo drones in India. The drones are designed for both defence and civilian applications with payload capacities ranging from 10-40 kg.

A feature of this JV is the integration of Heven Drones' proprietary hydrogen-powered technology, which offers significantly longer flight endurance compared to traditional battery-powered drones.

Financial Highlights of Paras Defence and Space Technologies

Source: Equitymaster

On the financial front, the company reported revenues of Rs 1,057 m in Q2 FY26 against Rs 871 m YoY. Paras Defence and Space Technologies reported a net profit of Rs 195 m vs Rs 127 m YoY. The revenues surged 21%, while the net profits grew by 53%.

Moving ahead, the company benefits from strong government initiatives like "Make in India" and increased defence spending focused on self-reliance and technology indigenisation, which will enhance Paras Defence's procurement opportunities.

The company holds a near-monopoly in indigenous critical imaging components for space and defence applications. It also secured international orders, including anti-drone technology contracts.

To know more check the Paras Defence fact sheet and latest quarterly results.

Should you Consider Stocks Associated with the Drone Industry?

Growing demand for drone and counter-drone and surveillance technologies enhances the defence-focused drone market segment.

Investing in drone-related stocks can tap into a high-growth sector with promising returns. However, it requires careful selection based on financial health, technology strength, order pipeline, market position, and alignment with government policies.

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.

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...