ideaForge Technology shares drop over 9% in two days. JM Financial downgrades rating

Shares of drone manufacturer ideaForge Technology extended its post-earnings slump, falling 9.5% over two days to trade at Rs 809.10 on the BSE on Wednesday. The stock fell after the company reported a 49% decline in its Q1 profit margin, despite positive earnings for the June quarter.

Citing strong prospects but a risk of order delays, domestic brokerage firm JM Financial downgraded its rating on the stock from Buy to Add, with a target price of Rs 905 (previously Rs 875), due to the strong run-up in the stock, i.e. 100% in the last six months.

Ministry of Defence’s Drone Procurement Programme

The Indian Ministry of Defence (MoD) has planned a Rs 20,000-crore drone procurement programme, largely focused on tactical and surveillance UAVs. These are expected to be procured through the fast-track procurement route, with an 18–24-month delivery timeline. However, other opportunities under the programme are at various stages of approval, which could defer project awards to FY28/29.

JM Financial's outlook

According to JM Financial, the company's Q1 results were strong on execution but weak on order inflows and profitability. Order book at the end of this quarter stood at Rs 257 crore, implying order inflows of Rs 11.2 crore for the quarter, which is significantly lower both year-on-year as well as quarter-on-quarter, as per the brokerage’s note.

While order prospects remain strong with strong policy thrust on procurement of tactical drones, most of the tenders are in the approval phases, which may push the translation of these prospects to inflows to FY28–29. JM Financial expects order inflows to weaken YoY in FY27 and pick up in FY28 and FY29, with inflow estimates aggregating to Rs 1,500 crore over the next two years.

JM Financial expects execution momentum to remain strong in the coming quarters. Management has guided for gross margins to remain at 50–55% in FY27, supported by the execution of high-margin orders. The brokerage estimates revenue to grow at a CAGR of around 47% over FY26–29E as order inflows pick up in FY28/29. It expects operating leverage to drive EBITDA margins from 2% in FY26 to around 30% in FY29, with profit after tax estimated to rise to Rs 27.6 crore in FY28 and Rs 170 crore in FY29.

ideaForge Technology Q1 results

ideaForge Technology reported a gross profit of Rs 33.6 crore, up from Rs 7.9 crore in the year-ago quarter. However, gross profit margin declined to 49% from 62% in the same quarter last year. Revenue from operations stood at Rs 68.6 crore during this June quarter, with the company executing over 20% of its opening FY27 order book, according to a regulatory filing released after market hours on Monday.

According to the company’s statement, global supply chain disruptions and component availability continue to pose challenges since the March quarter of FY26. However, the company remains focused on completing delivery of the opening order book of FY27 by Q3 as per customer timelines.

Also read | ideaForge Technology shares slide 5% after Q1 gross profit margin falls 49%

On order book visibility for FY27, co-founder and CEO Ankit Mehta said that the higher operational procurement limits for field commanders of Indian Defence Forces under DFPDS 2026 would accelerate procurement activities in Q3 and Q4, and that the company continues to see regular cycles on the civil side of the business that lean towards Q3 and Q4.

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