SYNOPSIS: India’s aerospace market is projected to reach Rs. 2.2 lakh crore by 2029. Here are three engineering companies quietly positioning themselves to benefit from rising defence spending, aircraft demand and aerospace supply chain expansion.
India has one of the largest and most capable military forces in the world, making the country strategically important in the global defence landscape. The domestic defence sector spans several critical segments, with military aircraft, naval vessels and surface combatants, and missile and missile defence systems emerging as some of the most prominent areas of focus.
The aerospace market is expected to expand steadily, with the addressable aerospace and defence market projected to grow from about Rs. 1.2 lakh crores in 2023 to around Rs. 2.2 lakh crore by 2029, reflecting an estimated annual growth of roughly 11 percent. Global air traffic is also expected to increase significantly, with Revenue Passenger Kilometres (RPK) projected to rise from 6 trillion in 2022 to around 12 trillion by 2029.
At the same time, the global aerospace industry continues to expand, driven by strong demand for commercial aircraft. The market is largely dominated by two major players, Boeing and Airbus, which together account for over 90 percent of global market share. Currently, the industry is sitting on a backlog of nearly 15,000 aircraft orders, with about 84 percent of these being narrow-body aircraft such as the Airbus A220, A320, and Boeing 737.
Additionally, during the Union Budget 2026-27, the Ministry of Defence has received the highest-ever allocation of Rs. 7.85 lakh crore, an increase of 15.19 percent over the Budgetary Estimates (BE) of FY26, accounting for 14.67 percent of the Budget, which is the highest among the Ministries. India’s defence budget rose from Rs. 2.53 lakh crore in 2013-14 to Rs. 7.85 lakh crore in 2026-27, an increase of around Rs. 5.32 lakh crore, representing nearly a three-fold rise.
Against this backdrop, the following three listed companies are quietly positioning themselves to benefit from the growing opportunities in the aerospace and defence ecosystem. Here are three lesser-known stocks that could gain from this trend.
Azad Engineering Limited
With a market cap of Rs. 9,640 crores, the stock closed in the red at Rs. 1492.7 on Friday, down by around 6 percent on BSE. Azad Engineering Limited is one of the only Indian manufacturers of highly engineered, complex, mission and life-critical high-precision components. Its products include 3D rotating airfoil portions of turbine engines and other key products for combustion, hydraulics, flight-controls, propulsion and actuation, which power defence and civil aircraft, spaceships, defence missiles, nuclear power, hydrogen, gas power, and oil & thermal power.
In 9M FY26, the company’s Aerospace & Defence segment contributed Rs. 73.5 crores, or 17 percent, to the total standalone revenue, with an increase of around 31.2 percent from Rs. 56 crores in 9M FY25.
The company is positioned as a critical supplier to original equipment manufacturers (OEMs) in the aerospace and defence sector, with a strong global presence. It manufactures and supplies key aircraft components across multiple categories, including outer structures such as fuselage, wings, empennage and landing gear; engine parts like fan, compressor, combustor, turbine and nozzle; and operational systems including avionics, flight control, hydraulics, rotary wings, fuel systems and pneumatic systems.
The company already supplies critical components for several major aircraft platforms, including Airbus, Boeing and Gulfstream. In addition, discussions are underway for supplying components for new engine platforms, which could further expand the company’s presence in the aerospace supply chain.
As of Q3 FY26, the company reported an order book exceeding Rs. 6,500 crores, providing multiyear revenue visibility. Looking ahead, the management has reaffirmed its FY26 revenue growth guidance of around 30 percent, while maintaining a long-term EBITDA margin target of 33-35 percent.
Raymond Limited
With a market cap of Rs. 2,366.7 crores, the stock closed in the red at Rs. 355.5 on Friday, down by around 6 percent on BSE. On 4th July 2025, Raymond received the NCLT order to reorganise the company into two companies. Post consolidation, Raymond Limited have two subsidiaries – one dedicated to the aerospace and defence, and the other focused on auto components, electric vehicles (EV), and engineering consumables.
The company’s aerospace business is housed in JK Maini Global Aerospace (JKMGAL), a subsidiary of Raymond. This company supplies mission-critical parts to global OEMs and Tier 1 suppliers, such as Airbus and Boeing.
Raymond Limited has established a strong presence in the Indian aerospace sector, particularly as a leading exporter of critical aero engine components. Aero Engine is its biggest revenue generator with over 3/4th of the revenue from this segment.
The company has developed more than 1,200 precision aero engine parts and produced over 350 components for the latest LEAP engine variants. Its capabilities are supported by a global customer base of more than 25 aerospace component manufacturing clients.
Over the past two decades, the company has built long-standing relationships with top aerospace original equipment manufacturers (OEMs) and Tier-1 suppliers worldwide. Raymond is also a preferred supplier to the top 3 Global Aircraft Engine Manufacturers, holding 88 percent market share.
The company’s Aerospace & Defence segment witnessed a robust revenue growth of 49 percent in Q3 FY26 compared to the previous year. This growth was fueled by production ramp-ups at key aerospace OEMs and Tier-1 customers, and incremental revenue from newly developed and approved parts that entered production this year, strengthening the overall topline.
Sansera Engineering Limited
With a market cap of Rs. 12,183 crores, the stock closed in the red at Rs. 1,957.95 on Friday, down by around 6 percent on BSE. Sansera Engineering Limited is involved in the business of manufacturing auto components such as rocker arms, connecting rods, gear shifters, crankshafts, and aerospace components, along with providing services such as forging and other related services. It is aggressively expanding the product range into fast-growing and trending spaces, EV & Tech-Agnostic and Defence & Aerospace.
As of December 2025, the company’s overall order book across businesses, which represents peak annual revenues for the new business, stood at Rs. 2,412.4 crores. During the same period, its exports to the USA recorded growth of 50.5 percent YoY, primarily driven by the stronger execution of Aerospace orders.
The company’s aerospace division has been witnessing strong financial momentum. In Q3 FY26, revenue from the Aerospace & Defence (ADS) segment increased more than fourfold year-on-year. During the first nine months of FY26, ADS revenue crossed Rs. 215 crore, reflecting steady growth in the segment.
The division is on track to achieve revenue of around Rs. 300-320 crore in FY26, with management expecting this to increase to Rs. 500-600 crore in FY27. Looking further ahead, the company anticipates annual execution of Rs. 1,200-1,300 crore by FY30, supported by its existing order backlog.
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