Turnover of 16 Defence Public Sector Undertakings Rises 15.4% to ₹1.29 Lakh Crore in FY26

The annual turnover of 16 Defence Public Sector Undertakings (DPSUs) grew by 15.4 percent to reach ₹1.29 lakh crore in the financial year 2025-26, according to data released by the Ministry of Defence ahead of an annual performance review.

Defence Minister Rajnath Singh will lead the performance review meeting, with a primary focus on advancing new technologies and boosting export capabilities. Alongside the rise in turnover, the DPSUs reported a cumulative Profit After Tax of ₹23,136 crore for 2025-26, representing a 15.6 percent growth over the preceding year. Furthermore, the Ministry noted a 151.2 percent increase in DPSU exports during the financial year.

During the upcoming review, the Chairman and Managing Directors (CMDs) of seven key DPSUs—Hindustan Aeronautics Ltd (HAL), Mazagon Dock Shipbuilders Ltd (MDL), Bharat Electronics Ltd (BEL), Bharat Dynamics Ltd (BDL), Garden Reach Shipbuilders & Engineers Ltd (GRSE), BEML, and MIDHANI—are scheduled to present dividend cheques for the government's equity shares for FY2025–26 to the Defence Minister.

In addition to financial assessments, the review will see the release of four publications: 'Aatmanirbhar DPSU - A journey of DPSUs towards Self-Reliance', an educational student initiative named DISHA focused on defense technologies and manufacturing, a Modernisation roadmap of HAL, and an Indigenisation roadmap of HAL.

Despite the positive financial and export figures, past parliamentary and audit reviews have highlighted operational and systemic challenges within the sector. Reports from the Public Accounts Committee (PAC) and the Comptroller and Auditor General (CAG) have pointed out the need for performance improvements.

A PAC report tabled in the Lok Sabha in July revealed that Advanced Weapons and Equipment India Ltd (AWEIL), one of the seven DPSUs, accumulated losses of ₹234 crore across three financial years due to high operational and administrative overheads at its small-arms factories. A subsequent PAC review in August 2026, referencing CAG findings, also noted that $4.5 billion out of $9.9 billion in pending defence offset obligations remained unfulfilled.

Additionally, a CAG compliance report tabled in late December 2025 examined procurement processes and identified delays in issuing 65 percent of tender enquiries and 59 percent of supply orders, which hindered production targets. The audit also cited instances where failures to follow standard testing guidelines resulted in financial losses.

"The financial growth and surge in exports reported by the Defence Public Sector Undertakings reflect positive momentum in domestic manufacturing. However, the operational challenges, overhead costs, and procurement delays highlighted by audit reports indicate that sustained long-term growth will require stricter compliance and operational efficiency. Balancing revenue expansion with better resource management remains critical for public sector enterprises." — Dr. Shishir Gupta, Founder & CEO, StartupLanes