India's Drone Revolution is a 4x Profit Opportunity

Sep 30, 2020

Editor's note: At midnight tonight, we are closing the access to Richa Agarwal's exclusive report on her top stock for 2021. Don't delay! Get this report now.


In the movie 3 Idiots, the engineering student with the most promising project, was working on a drone.

These small unmanned flyers have captured the imagination of engineers for a while now.

Tiny drones at high altitudes may seem as innocent and cute as a flock of birds.

But they have proven to be very useful in times of crisis.

For instance, they are used to search for stranded victims and drop food packets during natural disasters.

In happier times, the drones can simply serve ecommerce companies in delivering parcels.

But the use of drones, more recently, has been for potent national security concerns.

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She believes, this stock is primed for an unprecedented rally in the coming years.

It's a potential 10x opportunity in the long run.

Tanushree is confident about the potential of this defence stock because the Indian government has made a major change in the defence policy.

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Just a few months prior to the India-China standoff at Galwan, many on social media were amused by the sight of the drone delivery at China's borders.

Global Times and other Chinese media showed a number of small 'quadcopter' drones, which take off and land vertically. They apparently carried containers of food that were dropped from a low height and handed over to soldiers.

But was the whole exercise just as innocuous as it was portrayed to be?

For starters, it testifies to the progress China has made in development of drones of all sizes and all shapes. In fact, China has become a major supplier of large armed drones. Pakistan is a major client.

But one drone threat that, literally, slips off the radar is that of the 'drone swarm'.

This is an area in which China has undertaken considerable research.

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A drone swarm is a fleet of aerial robots deployed to achieve a specific goal. Thanks to its success, China's drone production is expected to grow 25-40% per year until 2025.

Chinese drones have been reported to be surveying Indian positions in eastern Ladakh even as the stand-off around the Line of Actual Control (LAC) continues.

It's imperative that India catches up in the use of drones for assisting armed forces.

Not just during periods of conflict but also for ensuring competent border surveillance in peaceful times.

Until 2016, India's R&D efforts for drones had suffered due to restrictions imposed by Missile Technology Control Regime (MTCR). This regime considers drones as weapons.

With India now a member of this cartel, it has better access to technologies and foreign partnerships.

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With help from DRDO, several Indian companies are now venturing into drone manufacturing through joint ventures with foreign firms.

I had referred to this in my video on defence stocks.

Unfortunately, many of these companies are either too small or unlisted.

However, my research on India's leading defence companies brought me to one major player riding the drone manufacturing opportunity.

Even by conservative estimates, the opportunity could be for 4x growth in the coming decade.

This is an exciting space. There is more to come.

Stay tuned...

Warm regards,

Tanushree Banerjee
Tanushree Banerjee
Editor, StockSelect
Equitymaster Agora Research Private Limited (Research Analyst)

PS: At midnight tonight, we are closing the access to Richa Agarwal's exclusive report on her top stock for 2021. Don't delay! Get this report now.

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1 Responses to "India's Drone Revolution is a 4x Profit Opportunity"

Ravi Kohli

Sep 30, 2020

Please let me know the companies in the Drone manufacturing in India and should I invest in the, or not
Thanks
Ravi

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