ideaForge Technology Ltd (NSE: IDEAFORGE) is an indigenous Indian manufacturer specializing in unmanned aerial vehicles (UAVs) for the defense and civil sectors. The company operates a business model focused on the design and production of dual-use drones, maintaining a dominant 50% market share within the domestic UAV industry. Its primary end markets include defense and paramilitary forces, where it ranks as the third-largest dual-use manufacturer globally.
Current Stock Price
₹420.25.
Market Capitalization
₹1,818.34 crores.
Valuation
The company lacks a meaningful price-to-earnings (P/E) ratio due to persistent losses. It currently trades at a price-to-book ratio of 3.27x, representing a 197% premium over its book value of ₹141.29 per share. This valuation is viewed as high for a loss-making entity, particularly with an enterprise value to sales (EV/Sales) ratio of 19.22x and a negative return on equity (ROE) of 16.34%.
Revenue Rises, Losses Explode
ideaForge’s financial profile remains unattractive due to a deepening operational crisis despite a growing order pipeline. While the company reported a record year-to-date order book of ₹440 crore, its net loss for the third quarter of fiscal 2026 more than doubled to ₹33.9 crore. Although revenue grew 79.16% year-on-year to ₹31.55 crore, a 65.7% surge in expenses caused operating margins to collapse to -84.06%, the lowest level in eight quarters. This discrepancy highlights a critical inability to translate revenue and billings into profitability, as sequential revenue actually declined by 22.6% compared to the previous quarter.
Competitive and institutional pressures further weigh on the stock’s outlook. While the broader Indian drone market is projected to reach $1.39 billion by 2030, ideaForge has struggled to maintain the profitability seen by peers such as Bharat Electronics and Hindustan Aeronautics. Foreign institutional investors have nearly exited the stock, reducing their holdings from 3.50% to 0.25% over the last year, signaling deep skepticism regarding a turnaround. Technical indicators remain bearish, with the stock trading below all major moving averages and sitting 36.37% below its 52-week high.
The company faces a mix of cyclical and structural risks that cloud its path to recovery. Cyclical risks include the “lumpy” nature of defense contracts, which leads to extreme revenue volatility and unpredictable quarterly performance. More concerning are the structural risks, including persistent cash burn recorded at ₹76 crore in fiscal 2025 and significant cost overruns that have eroded shareholder funds. Management intends to fulfill 40-45% of its open orders in the final quarter of fiscal 2026 to improve margins, but until the company demonstrates a consistent ability to generate positive operating cash flow, it remains a high-risk prospect for investors.