Krishna Defence & Allied Industries Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Krishna Defence & Allied Industries Ltd trades at ₹1,030, in a confirmed uptrend and 37 weeks into that stage. That is −2.3% against its own 200-day average. It sits at 49% of a 52-week range of ₹727 to ₹1,351. On relative strength it is currently behind the NIFTY 500 on a trailing-13-week view (8 weeks and counting).

Today the stock is in a confirmed uptrend — week 37 of stage 2, confirmed. At ₹1,030 it trades −2.3% versus its 200-day average and sits at 49% of its 52-week range (₹727–₹1,351).

Against the market, two honest reads. Cumulative: over the last 4.4 years the stock moved +1,087% while the NIFTY 500 moved +51% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock is currently behind (8 weeks and counting; last ahead the week of 2026-07-24) — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

Krishna Defence & Allied Industries Ltd's story is not scored yet against the markers our research file set on 17 May 2026. Where it sits in its own cycle: NEAR_TROUGH. Still open: FY25 operating cash flow negative vs PAT — typical defense SME collection lag but unresolved.

Our read, 17 May 2026. A micro-cap defense supplier printing OPM expansion from 11% to 22% on operating leverage — but with an unresolved cash conversion problem.

From the numbers. PE compressed from peak 84.6x (Jun 2024) to current 45x — a 47% compression while EPS expanded from 4.63 (FY23) to 15.76 (FY25). The compression is earnings-driven: price stayed roughly flat while profits tripled. At…

From the price. Price stage 2, week 37 — below its 200-day line, relative strength falling.

From the research. A micro-cap defense supplier printing OPM expansion from 11% to 22% on operating leverage — but with an unresolved cash conversion problem.

🚨 Where they disagree. PE compressed from peak 84.6x (Jun 2024) to current 45x — a 47% compression while EPS expanded from 4.63 (FY23) to 15.76 (FY25). The compression is earnings-driven: price stayed roughly flat while profits tripled. At 38th percentile of observable history, PE is near trough. However the single observable cycle and limited history reduce confidence in cycle-based signals.

What is proven. A micro-cap defense supplier printing OPM expansion from 11% to 22% on operating leverage — but with an unresolved cash conversion problem.

What is not proven yet. FY25 operating cash flow negative vs PAT — typical defense SME collection lag but unresolved.

The test written in advance. Working Capital Intensity / Negative CFO — Working Capital Intensity / Negative CFO FY26 annual CFO/PAT ratio — must be ≥ 0.5 by the next result.

The test written in advance. Revenue Lumpiness / Execution Dependence — Revenue Lumpiness / Execution Dependence Annual revenue trend — FY26 must sustain or exceed FY25's 194 Cr by the next result.

The test written in advance. Customer Concentration in Government Procurement — Customer Concentration in Government Procurement Any announcement of new customer wins or program diversification by the next result.

Lever 1 · Operating leverage — BUILDING. OPM expanded from 11% (Dec 2024) to 22% (Dec 2025) as revenue scaled — 11pp expansion over 4 consecutive quarters. What proves it keeps working: Operating Leverage Inflection. It stops working if FY26 annual CFO/PAT ratio — must be ≥ 0.5.

Sources: our stock research file (17 May 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Krishna Defence & Allied Industries Ltd reported ₹58.0 Cr of revenue in the Jun 26 quarter, −14.7% year on year. Over 7 years it has compounded at 22.9% a year. The last full year, FY26, came in at ₹245 Cr. The last four reported quarters add to ₹235 Cr.

FY26 revenue came in at ₹245 Cr (+28.9% on the year), capping 7 years at 22.9% compound. The latest quarter (Jun 26) printed ₹58.0 Cr, −14.7% year on year.

Pace check: the last four quarters averaged +0.2% growth against the decade's 22.9% — the current year is running slower than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew −9.6% over the last 4 quarters against +17.6%/yr over the last 8 — rolling over; TTM profit +38.7% vs +63.9%/yr — rolling over.

FY26-Q3. Margin expansion continues — OPM at 22%

Why-sources: our stock research file (17 May 2026) and the company’s own results for those quarters.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Krishna Defence & Allied Industries Ltd's operating margin is 26.0% in the Jun 26 quarter, +7.0 percentage points against the same quarter a year ago. That is the widest this company has ever printed on a full-year basis. Across 8 fiscal years the operating margin has ranged 10.0% to 22.0%.

Why this happened. The defense manufacturing fixed cost base (machinery, certifications, specialized labor) is largely constant. As defense order execution accelerated, incremental revenue dropped at much higher margins. OPM in Q3 FY26 at 22% vs Q4 FY25 at 11% — the inflection is measurable and multi-quarter, not single-quarter noise. The annual trajectory (FY23: 14%, FY24: 15%, FY25: 16%) shows a multi-year base expanding, with the quarterly prints in FY26 well ahead. Operating leverage works in reverse too — if revenues miss, margins compress quickly.

The latest quarter's operating margin is 26.0%, +7.0 pp against the same quarter a year ago. Across 8 fiscal years the operating margin has ranged 10.0%–22.0%, and FY26's 22.0% is the top of that band — a record year.

Why the margin moved: operating margin went +7.8 pp year on year while gross margin went +1.4 pp — the gain came mostly below the gross line: operating leverage, with costs spread over a bigger revenue base.

Worth repeating from the valuation section: cheap against its own history on record margins is not the same thing as cheap — a record margin flatters every ratio built on top of it.

FY26-Q3. Margin expansion continues — OPM at 22%

Why-sources: our stock research file (17 May 2026) and the company’s own results for those quarters.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Krishna Defence & Allied Industries Ltd earned ₹11.0 Cr of net profit in the Jun 26 quarter, +22.2% year on year. It is the 3rd consecutive quarter of growth. Full-year FY26 profit was ₹41.0 Cr. The 7-year compound rate is 54.0%. That is 19.0% of the quarter's revenue. The same quarter a year earlier earned ₹9.0 Cr.

Jun 26 profit was ₹11.0 Cr, +22.2% year on year — the 3rd consecutive quarter of growth. On the full year, FY26 printed ₹41.0 Cr (+86.4%), and the 7-year compound rate is 54.0%.

Why profit moved: revenue contributed −14.7% and the margin +7.0 pp — the quarter was margin-led: most of the profit growth came from keeping more of each sale.

Pace comparison, last four quarters: profit +59.9% vs revenue +0.2%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

FY26-Q3. Margin expansion continues — OPM at 22%

Why-sources: our stock research file (17 May 2026) and the company’s own results for those quarters.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 99% of Krishna Defence & Allied Industries Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹86.0 Cr of operating cash against ₹41.0 Cr of profit. After ₹16.0 Cr of capital spending, ₹70.0 Cr was left as free cash.

FY26: operating cash of ₹86.0 Cr against reported profit of ₹41.0 Cr, leaving free cash of ₹70.0 Cr after ₹16.0 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 99% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 99%: the cash cycle tightened 250 days between FY21 and FY26 — cash that used to wait in the cycle now reaches the bank sooner.

Router verdict: the bigger cash user is investment — capital spending ran 3.6× depreciation over three years, so the next section's job is to check what that build-out is buying.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Krishna Defence & Allied Industries Ltd's cash conversion cycle runs 80 days in FY26, down from 330 days in FY21. Capital spending ran ₹32.0 Cr over the last 3 years. At FY26 sales of ₹245 Cr each day of that cycle holds about ₹0.7 Cr, so roughly ₹54.0 Cr sits inside the business at any moment.

FY26: debtors at 52 days, inventory at 47 days — roughly 1.5 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of 80 days, tighter than FY21's 330.

The full loop: cash goes out to suppliers and production on day 0; stock waits 47 days to sell; customers pay about 52 days after that; and suppliers themselves are paid at 19 days — netting out to the 80-day cycle.

In money terms: at FY26 sales of ₹245 Cr, each day of the cycle holds about ₹0.7 Cr — so the 80-day loop keeps roughly ₹54.0 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹32.0 Cr over the last 3 fiscal years against ₹9.0 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹3.0 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the cash is going into capacity, not disappearing into the cycle — the question becomes whether the new capacity earns.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.⚠ unverified

Krishna Defence & Allied Industries Ltd earns a ROCE of 31% in FY26. That is up from a trough of 8% in FY20. Return on invested capital clears the cost of that capital by +9.9 percentage points, so growth here adds value rather than only size. The wiring behind it is 16.7% net margin on 1.13× asset turns.

FY26 ROCE is 31%, recovered from a FY20 trough of 8% — the full ladder below shows the fall and the climb, undoctored.

Why the return is what it is — the wiring (FY26): 16.7% net margin × 1.13× asset turns × 1.12× balance-sheet leverage ≈ 21.1% on equity. Margin is doing the heavy lifting; leverage is modest — this is an earned return, not a borrowed one.

The capstone test — ROIC − WACC: 21.9% − 12.0% = a +9.9 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. A spread this wide means every rupee reinvested creates more than a rupee of value — the engine compounds.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.⚠ unverified

Krishna Defence & Allied Industries Ltd carries total debt of ₹2.0 Cr against shareholder equity of ₹194 Cr as of Mar 26, a debt-to-equity of 0.01 — effectively unlevered. On the annual view that ratio went from 0.96 in FY22 to 0.01 in FY26. The returns elsewhere on this page are therefore earned rather than borrowed.

Mar 26: total debt of ₹2.0 Cr against shareholder equity of ₹194 Cr — a debt-to-equity of 0.01. On the annual view, debt-to-equity went from 0.96 (FY22) to 0.01 (FY26). The returns on this page are earned, not borrowed.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Promoters cut 8.4 points of Krishna Defence & Allied Industries Ltd over 8 quarters, the biggest move on the register. That takes promoters to 59.9% of the company. Foreign institutions moved +1.4 points over the same window, to 1.4%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Promoters: −8.4 points over 8 quarters to 59.9%; Foreign institutions: +1.4 points over 8 quarters to 1.4%; Domestic institutions: +1.3 points over 8 quarters to 1.3%.

🚨 Why the register moved: promoters drove it (−8.4 points), absorbed on the other side by foreign institutions (+1.4 points) — distribution into the market’s bid.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Krishna Defence & Allied Industries Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Krishna Defence & Allied Industries Ltd trades at 35.6× P/E, near the bottom of its own range — cheaper only 3% of the time. Its long-run median P/E is 53.1×, measured across 3.3 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 35.6× is near the bottom of its own range — cheaper only 3% of the time, against a long-run median of 53.1× measured over 3.3 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

One caveat before moving on: margins are the best this company has ever printed — cheap against its own history on record margins is not the same thing as cheap. If profitability mean-reverts, today's multiple is higher than it looks.

Why the multiple sits where it does: over the past year annual EPS moved +74.8% against a +27.2% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 3y, of the +47.3%/yr price move, ~+84.4%/yr came from earnings growth and ~−37.1 pp from the multiple (compressing). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is low against its own past, so the story rests on the earnings line underneath it, not the multiple.

A quarterly PEG curve, which only the second data source carries, is not drawn on this page: its two data sources do not share enough overlapping reported history to be compared. A figure nobody could check is not used to price growth — the gap is a decision, not missing data.

What the price assumes This reading works the multiple backwards. It asks one question: what yearly rate of profit growth is a buyer at the market price already paying for? The number is the growth rate that makes eleven years of profit — six years growing, then five fading — add up to that day's market price, once each year is discounted at 11% a year.

Solved at its 13 June 2026 price, Krishna Defence & Allied Industries Ltd was paying for profit growth of about 24.6% a year. Profit itself has compounded 54.0% a year over the past 7 years. Today the market pays 35.6× P/E, the 3rd percentile of its own 3-year range.

What the two numbers say together. The multiple is low against its own past, and the growth the price is paying for is below what this company has actually delivered.

How to hold this number: it is a reading of one day's price, taken on 13 June 2026, not a running figure — every other number on this page, the multiple included, is read off the live quote as of 18 September 2026. A higher price is paying for more growth and a lower price for less, so it moves whenever the price does, and this page does not restate it between measurements.

Stage: Turning around Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Krishna Defence & Allied Industries Ltd reads as turning around on its fundamental arc. Turning around — profit growth swung from +0.0% at the trough to +22.2% off a 5-quarter-old trough (single-quarter readings), ROCE lifting at 31.0%. The read is built from 9 quarters across 3 curves, on partial evidence.

Why it matters: growth inflections are where re-ratings start — the curves say a turn is forming, so the question becomes whether the next quarters confirm it.

One or more growth curves carry a base-effect spike — a large year-on-year move off a near-zero or loss-making comparable quarter. Those spikes are capped before the classifier reads the trajectory, and shown pinned on the chart, so a single distorted quarter does not drive the stage call.

Return readings here are annual, not quarterly — read as level and direction only; they can confirm the growth curves but never drive the stage on their own.

A partial read: at least one curve is short, or the returns curve is not the computed quarterly series — hold the stage word a little more loosely.

4-Factor Sector Score

64.3/100 — rank 3 of 3 in Shipping - Proxy · 84% evidence confidence

Krishna Defence & Allied Industries Ltd scores 64.3 out of 100 against the 3 companies it is compared with in Shipping - Proxy, ranking 3. Acceleration candidate, not a confirmed leader: earnings are strong but sector-relative strength is -27.2% and the one-year return is 25.6%. Do not upgrade until sector-relative strength is above zero and another reported period confirms growth.

The four contributions add to the total exactly: 27.5 + 19.6 + 12.5 + 4.7 = 64.3. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Said versus delivered

What Krishna Defence & Allied Industries Ltd's management promised, set against what actually arrived — 3 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

Capacity Limitation Discrepancy · 22 May 2026. In the Nov 2025 call, the Chief Financial Officer stated that the existing capacity could support manufacturing only up to 200 crores in revenue. However, in the latest May 2026 call, management reported full-year FY26 revenue of 2,448 million rupees (244.8 crores), which exceeds that stated capacity limit. Additionally, in the latest call, management stated that the current infrastructure can organically support a much higher revenue of 400 to 500 crores.

Growth Guidance Revision · 22 May 2026. In the Nov 2024 call, management projected a growth rate of close to 40% CAGR over a three-to-five-year period, which was subsequently adjusted to a range of 30% to 40% CAGR in the Nov 2025 call. In the latest May 2026 call, the long-term outlook was further reduced to 30% plus over the next three years, demonstrating a clear and cumulative downward revision in long-term growth expectations.

Wave Optics Performance Downplay · 22 May 2026. During the Nov 2025 call, management downplayed concerns of a potential revenue slowdown at Wave Optics despite a low remaining order book, asserting that the division would continue doing well. However, the latest May 2026 call reveals that Wave Optics generated nearly flat revenue and profit in the second half of the fiscal year, with full-year revenue reaching only 22 to 23 crores compared to the 18 crores achieved in the first half alone.

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions