In a significant boost to India’s defence manufacturing ambitions, Lokesh Machines Ltd (NSE: LOMA.NS) saw its shares climb nearly 4% on Friday following the announcement that it has received a formal registration certificate from the Directorate General of Quality Assurance (DGQA). This certification authorizes the Hyderabad-based engineering firm to manufacture defence-grade items, including heavy machine guns and small arms components, marking a pivotal moment in its transition from industrial machinery to strategic defence supplier.
At 12:15 PM IST, Lokesh Machines stock was trading at ₹378 apiece, up 0.47% from the previous close, with intraday gains peaking at 3.7%. The company’s market capitalization now stands at ₹699 crore, reflecting investor optimism around its expanding defence portfolio.
What the Certification Means
The DGQA registration allows Lokesh Machines to manufacture fixed and towed heavy machine guns of calibers ranging from 12.7mm to 30mm. This certification is a prerequisite for bidding on defence contracts and supplying equipment to the Indian Armed Forces. It also signals that the company meets the stringent quality and reliability standards set by the Ministry of Defence.
This development follows Lokesh’s recent ₹17.68 crore contract win from the Integrated Headquarters of the Ministry of Defence (Army), New Delhi, for the supply of modification kits for 7.62mm Medium Machine Guns (MMGs)3. The kits are expected to enhance operational efficiency and ergonomics of existing infantry weapons and will be delivered within 12 months.
Financial Performance and Order Book
Lokesh Machines has shown steady financial growth over the past year:
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Revenue: ₹293 crore in FY 2023–24, up 23% YoY
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Net Profit: ₹14 crore, up 40% from ₹10 crore in FY 2022–23
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Operating Profit Margin: Improved from 9.84% to 10.91%
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Net Profit Margin: Reached 4.71%
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ROE and ROCE: 7.06% and 12.42%, respectively
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Debt-to-Equity Ratio: Slightly increased from 0.55x to 0.60x
The company’s total order book stands at ₹216.36 crore, with ₹123 crore allocated to the Auto Components & Defence division and ₹93.36 crore to the Machine Tools division. The defence segment is expected to grow significantly following the DGQA certification and recent contract wins.
Defence Manufacturing Capabilities
Lokesh Machines has been steadily building its defence manufacturing capabilities over the past few years. The company now produces:
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12,000 units annually in its defence division
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3 million units in its auto components division
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1,400 units in its machine tools division
It is also the developer of the indigenous submachine gun “Asmi,” which was inducted into the Indian Army earlier this year with a supply of 550 units to the Northern Command. Designed in collaboration with the Armament Research & Development Establishment (ARDE), Pune, Asmi has been praised for outperforming international competitors in field trials.
Navigating Global Challenges
Despite its domestic success, Lokesh Machines has faced international scrutiny. The company was recently placed on a U.S. sanctions list due to alleged shipments linked to Russian defence procurement. However, the Indian government has clarified that Lokesh Machines has not violated any national laws and continues to support its role in defence indigenization.
The company is actively seeking removal from the sanctions list and has engaged legal channels to resolve the issue. Meanwhile, its operations and contracts within India remain unaffected, and the DGQA certification further reinforces its credibility as a trusted defence supplier.
Outlook
With the DGQA certification in hand, a growing order book, and a proven track record in indigenous weapon development, Lokesh Machines is poised to become a key player in India’s defence manufacturing ecosystem. The company’s strategic pivot aligns with national goals under “Make in India” and “Atmanirbhar Bharat,” and investors are clearly taking notice.
As India continues to modernize its military and reduce reliance on imports, firms like Lokesh Machines will be instrumental in shaping the future of domestic defence production.
Sources: Trade Brains, Market Setup, Indian Defence News
