Krishna Defence shares soar 20% as picks-and-shovels play gets 72% upside target
Antique said Krishna Defence offers a direct picks-and-shovels exposure to India’s naval and commercial shipbuilding cycle through its entrenched position in certification-gated inputs.
- Oct 5, 2026,
- Updated Oct 5, 2026 12:38 PM IST
Shares of Krishna Defence And Allied Industries Ltd soared 19 per cent in Monday's trade as the scrip got a 72 per cent upside target from Antique Stock Broking, which initiated coverage on what it called a 'classic picks-and-shovels play' with a 'Buy' rating.
Antique said Krishna Defence offers a direct picks-and-shovels exposure to India’s naval and commercial shipbuilding cycle through its entrenched position in certification-gated inputs. Long licensing and qualification cycles create a meaningful entry barrier, while the company’s approved-vendor status allows it to participate in the sector’s volume expansion with limited competitive disruption, Antique said.
"AUVs, smart ammunition and composites provide additional optionality, although these businesses are not yet incorporated in our estimates. We initiate coverage with a Buy and target of Rs 1,725," the domestic brokerage said.
Following the report, Krishna Defence shares soared 20 per ecnt to hit a high of Rs 1,201 apiece on NSE. With this, the stock is up 41 per cent in 2026 so far.
Antique said India’s shipbuilding sector is poised for a multi-year growth phase, backed by rising spending on both naval and commercial shipbuilding. Mazagon Dock, Cochin Shipyard and GRSE alone carry an unexecuted order book of Rs 53,700 crore, with a broader warship pipeline of Rs 4,59,400 crore over the next 10-15 years, nearly 9 times current order book. A further Rs 2,20,000 crore in the commercial vessel order pipeline is likely.
Antique said Bulb bar demand scales directly with tonnage under construction — a standard warship requires 1,500 tonnes, giving Krishna's core segment direct leverage to the shipbuilding pipeline above. Weld consumables, a smaller but higher-margin segment, rides the same shipbuilding volumes, as they are used to weld critical platforms and surface ships, with Krishna Defence being one of only two approved vendors nationally.
"We forecast revenue CAGR of 31 per cent over FY26–29E, supported by the multi-year shipyard order book and early commercial-shipbuilding enquiries following IRS certification. The current order book stands at Rs 117 crore, with a further bid pipeline of Rs 200 crore. Existing infrastructure can support revenue of Rs 400-500 crore, providing adequate capacity through FY28E, with a new capacity cycle likely required by FY29–30. We expect gross margins to remain broadly stable at 48 per cent through FY29E, with product mix remaining largely unchanged," Antique said.
It said Krishna Defence's Ebitda margin is expected to expand 260 basis points (bps) from 21.3 per cent in FY26 to 23.9 per cent by FY29E, driven by operating leverage.
"Consequently, ROCE is expected to reach 32 per cent and ROE 26 per cent by FY29E. Our estimates do not factor in revenue from the AUV and smart-ammunition businesses, which remain 2–3 years from commercialisation and provide additional unmodelled upside," it said.
Shares of Krishna Defence And Allied Industries Ltd soared 19 per cent in Monday's trade as the scrip got a 72 per cent upside target from Antique Stock Broking, which initiated coverage on what it called a 'classic picks-and-shovels play' with a 'Buy' rating.
Antique said Krishna Defence offers a direct picks-and-shovels exposure to India’s naval and commercial shipbuilding cycle through its entrenched position in certification-gated inputs. Long licensing and qualification cycles create a meaningful entry barrier, while the company’s approved-vendor status allows it to participate in the sector’s volume expansion with limited competitive disruption, Antique said.
"AUVs, smart ammunition and composites provide additional optionality, although these businesses are not yet incorporated in our estimates. We initiate coverage with a Buy and target of Rs 1,725," the domestic brokerage said.
Following the report, Krishna Defence shares soared 20 per ecnt to hit a high of Rs 1,201 apiece on NSE. With this, the stock is up 41 per cent in 2026 so far.
Antique said India’s shipbuilding sector is poised for a multi-year growth phase, backed by rising spending on both naval and commercial shipbuilding. Mazagon Dock, Cochin Shipyard and GRSE alone carry an unexecuted order book of Rs 53,700 crore, with a broader warship pipeline of Rs 4,59,400 crore over the next 10-15 years, nearly 9 times current order book. A further Rs 2,20,000 crore in the commercial vessel order pipeline is likely.
Antique said Bulb bar demand scales directly with tonnage under construction — a standard warship requires 1,500 tonnes, giving Krishna's core segment direct leverage to the shipbuilding pipeline above. Weld consumables, a smaller but higher-margin segment, rides the same shipbuilding volumes, as they are used to weld critical platforms and surface ships, with Krishna Defence being one of only two approved vendors nationally.
"We forecast revenue CAGR of 31 per cent over FY26–29E, supported by the multi-year shipyard order book and early commercial-shipbuilding enquiries following IRS certification. The current order book stands at Rs 117 crore, with a further bid pipeline of Rs 200 crore. Existing infrastructure can support revenue of Rs 400-500 crore, providing adequate capacity through FY28E, with a new capacity cycle likely required by FY29–30. We expect gross margins to remain broadly stable at 48 per cent through FY29E, with product mix remaining largely unchanged," Antique said.
It said Krishna Defence's Ebitda margin is expected to expand 260 basis points (bps) from 21.3 per cent in FY26 to 23.9 per cent by FY29E, driven by operating leverage.
"Consequently, ROCE is expected to reach 32 per cent and ROE 26 per cent by FY29E. Our estimates do not factor in revenue from the AUV and smart-ammunition businesses, which remain 2–3 years from commercialisation and provide additional unmodelled upside," it said.