Krasny Defence - The company that keeps India's Russian warships alive

Krasny Defence Technologies — what it does, what it earns, and what ₹112 a share is asking you to believe

India has spent five decades buying Russian naval equipment. Ships, submarines, radars, sonars, control systems.

All of it eventually breaks.

And when it does, the Indian Navy can't just email a factory in St. Petersburg. There's no commercial channel, and defence procurement requires a registered Indian vendor with the right clearances. Someone has to sit in the middle.

That someone, for the last thirty years, has largely been Krasny Defence Technologies.

It's a ₹107 crore revenue company run by retired naval officers, and its unlisted shares trade at ₹112 — a market cap of ₹1,314 crore. That's roughly 49 times last year's profit.

The question this note is really about: what exactly are you paying 49x for?

Think of an authorised Mercedes service centre. Mercedes builds the car in Germany. You don't fly to Stuttgart for a service — an Indian company holds the dealership, imports genuine parts, employs trained mechanics, and bills you.

Krasny is that, except the cars are warships and the customer is the Indian Ministry of Defence.

Founded in 1995 in Mumbai under the SEMFEX scheme, it built two things that are genuinely hard to copy.

On the Indian side — access. Registered vendor status with Naval Dockyard Mumbai, Naval Dockyard Vizag, Naval Ship Repair Yard Karwar, Mazagon Dock, GRSE, Goa Shipyard, Hindustan Shipyard, HAL and the Indian Coast Guard. Each of those registrations takes years. Krasny has been accumulating them for three decades. It holds CEMILAC certification for Russian military avionic repairs — reportedly the first Indian private company to get it — plus DGAQA and ISO 9001.

On the Russian side — authorisation. Krasny is the authorised Indian representative for several Russian defence manufacturers, and works with JSC Radar MMS, Zvezda Shipbuilding Complex, JSC United Shipbuilding Corporation, JSC Rosoboronexport, JSC MEEC, JSC Zaslon and JSC Morinformsystems Agat. In 2023 it was approved by FS-MTC Russia as the sole Indian private-sector partner for military products.

Neither side of that bridge is buyable. That's the moat.

And it's deliberately asset-light. Fixed assets were ₹9 crore against ₹107 crore of revenue in FY25. Where Krasny lacks a product, it forms a JV rather than a factory:

• Avrora (India) Marine Systems (49%) — with Avrora Scientific & Production Association, Russia. Submarine control systems, simulators, sensors.

• Vimal Fire Krasny Defence (50%) — shipboard fire detection and suppression.

• Krasny Paras Defence Technologies (47.5%) — with Paras Defence. Electro-optics, radar and navigational aids, hull fittings.

• Keltron Krasny Defence Systems (51%) — with Kerala's state electronics corporation. Sonars and radars for Make in India.

Krasny brings the customer relationship and the certifications. The partner brings the product. Two wholly-owned subsidiaries do the heavy lifting: Krasny Marine Services (ship repairs and refits) and Krasny Kamen LLC (a Russian subsidiary in Bolshoi Kamen).

Five verticals. Here's what each actually is, and what FY25 looked like.

Russian shipbuilding — 48% of FY25 revenue. This one surprises people. Russia's Zvezda shipyard is short of skilled labour. Krasny set up Krasny Kamen LLC and deployed 220+ Indian technicians there to do electrical outfitting, cabling, hull block fabrication, blasting and painting on new-build vessels. Two contracts in October 2023 (~₹70 crore), two more in October 2024 (~₹100 crore). It is, in essence, labour export.

Ship repairs and refits — 40%. Physical work in dry docks. Hull, engineering, electrical, non-destructive testing, robotic hull scanning. 70+ refits completed. Krasny says it is the sole private-sector entity registered with the Indian Coast Guard to refit across all major vessel categories — AOPV, PCV, OPV, FPV and Charlie-class.

Lifecycle support — 9%. Selling Russian-origin spares to the Navy through DPRO, DWE and WEDs. Valves, marine sewage treatment plants, RSU sensors and calibrators, converters. Small today. This is where management expects the growth.

R&D and manufacturing — 2%. Ship doors and hatches at Pune, Russian electronic module repairs at Navi Mumbai, import substitutes.

Make in India — currently negligible. Fregat radar upgrades, Active Towed Array Sonar, executed through the Keltron JV.

Now the interesting part. Here's the mix management is projecting for FY27:

That is not a tweak. That is a different company.

And note why Russian shipbuilding collapses: those contracts end. The CIM states the first two complete in October 2025 and the next two in September 2026. So roughly half of the FY25 revenue base is contractually finishing — the growth has to replace it, not build on it.

This is the part most people get wrong, so it's worth slowing down.

You can't just win a defence order. You have to be allowed to bid.

Every dockyard, shipyard and command maintains its own vendor register. Getting on it means audits, certifications, past-performance records and clearances. It takes years, and it's per-establishment — being registered at Naval Dockyard Mumbai does nothing for you at Karwar. This is why the CIM spends a full page showing registration certificates. Those certificates are the business.

Once you're in, the work is repeat and rate-contracted. Ships come in for refit on cycles. Rate contracts with dockyards mean pre-agreed pricing for standard jobs. Krasny's claim of having delivered three refits simultaneously at three locations matters because concurrency, not capability, is usually the constraint.

On spares, the buyer often has no choice. For a Russian-origin item where Krasny holds the OEM authorisation, it is the only registered Indian vendor who can supply. Look at the pipeline table in the CIM and three of the largest items are marked "Sole Bidder" — ₹2,000 crore of Fregat radar upgrades, ₹619 crore and ₹250 crore of Russian spares to DWE. No competitive tension on price.

But you get paid on the government's clock, not yours. This is the operational reality that explains the entire fundraise. Krasny carried ₹52 crore of unbilled income at FY25 — roughly half a year of revenue for work already done but not yet invoiced. The CIM attributes it to the Navy's year-end fund reallocation process, and to similar timing at Zvezda.

So the business is: hard to enter, sticky once you're in, often sole-source on price — and brutal on working capital.

Which is exactly why the ₹150 crore being raised is debt for working capital, not equity for growth. ₹100 crore goes to fulfilling the ₹232 crore Valsura Fregat radar order — delivery December 2026, payment February or March 2027, at ~20% gross margin. ₹50 crore goes to facilities at Pune, Vizag and Mumbai.

Fourteen months of funding a contract before the cheque arrives. That's the job the money is doing.

Cdr. (Dr.) V.G. Jayaprakasan, IN (Retd.) — Chairman & Managing Director. A naval veteran who was part of the first task force that attacked Karachi Harbour in the 1971 war. He took voluntary retirement while on deputation to Garden Reach Shipbuilders and founded Krasny in 1995 — the original idea being to put ex-servicemen's expertise to work maintaining defence equipment. Over 50 years in the naval defence sector. Awards include Entrepreneur of the Year and Best Implementor of "Make in India" at the Aerospace & Defense Awards 2021. He holds 71.3% of the equity.

Naveen Jayaprakasan — Joint MD of Krasny, MD of Krasny Marine. The founder's son. MBA and MCA from the UK, joined Krasny in 2001 as a management trainee, 20+ years in defence. He built the JV portfolio and runs the diversification strategy. Holds 10.7%.

Sarala Jayaprakasan — Director. Holds 4.0%.

Around them sits a bench that is almost entirely ex-Navy: Commodore M.L. Mathew, NM (Retd.) as CEO, 36+ years in weapons systems, radars and sonars, a Nao Sena Medal recipient. RAdm. V.S. Batra (Retd.) as Principal Advisor, formerly Registrar at DIAT. Cdr. Ramesh Ramakrishnan (Retd.) heading representation in Russia. Cmde Pravin Kulkarni on projects, Senthil Kumar M as CTO.

That composition is the actual competitive advantage. People who spent careers operating the equipment, inside the procurement system, now selling into it.

Promoter and family hold about 86% per the CIM; UnlistedZone shows promoters at 88.01% as of FY25. The remaining ~14% includes the promoters of Aarti Industries.

FY25 is a genuinely big year. Revenue more than doubled, PAT tripled. CRISIL upgraded the bank facilities to CRISIL BBB/Stable and A3+ in December 2025.

But read the rows against each other and something stands out.

PBT is bigger than EBITDA. In all three years.

FY23: EBITDA ₹5.4 crore, PBT ₹7.0 crore. FY24: ₹8.8 crore versus ₹11.2 crore. FY25: ₹21.3 crore versus ₹33 crore.

That's arithmetically impossible from operations alone — after EBITDA you subtract depreciation and interest, you don't add. So a meaningful slice of profit is arriving from below the operating line: other income, or share of profits from the associates and JVs. In FY25 the gap is roughly ₹12 crore before even accounting for depreciation and interest, against PAT of ₹27 crore.

The balance sheet, for what it's worth, is clean. Debt-to-equity of 0.02. On-balance-sheet debt of ₹22 crore of OCPS plus ₹5 crore of cash credit, with ₹47 crore of bank guarantees off balance sheet. ROE of 22.06%.

And here's what management is projecting from here:

Revenue up nearly 11x in four years. Against a signed order book of ₹742.8 crore and a stated total pipeline of ₹12,262 crore.

Worth separating those two numbers carefully. The ₹742.8 crore is contracted. The ₹12,262 crore includes ₹4,000 crore labelled "new orders expected after FY28" at moderate probability, and a ₹4,000 crore Active Towed Array Sonar programme that hasn't been awarded. The genuinely committed figure is the first one.

Source: UnlistedZone, indicative level as of 3 August 2026

First, a detail about the share count. The company had 1,15,15,267 equity shares of ₹10 face value as on 31 March 2025. A 10:1 split took that to 11,51,52,670 shares of ₹1 — no new capital, just a smaller denomination. There are also 21,50,000 CCPS of ₹100 face value outstanding, raised at ₹100 in August 2023 for ₹21.5 crore. Because the company retains an option to buy them back rather than convert, they weren't treated as dilutive — FY25 basic EPS equalled diluted EPS. If they do convert, the conversion ratio isn't yet disclosed. Worth pinning down. Once these CCPS are converted the number of outstanding shares will be increased. Hence, the current valuation which you see on UnlistedZone's Platform is not exact.

Now the multiples.

On trailing FY25 numbers, ₹1,314 crore against ₹27 crore of PAT is 48.7x earnings, and against ₹107 crore of revenue is 12.3x sales. For a ₹107 crore services business, both are demanding.

But nobody is buying this on trailing numbers. They're buying the projections. So:

Read that table honestly and the position is clear: the price is expensive on what exists and cheap on what's promised. At FY29 projections it's 5x EBITDA, which would be a bargain. At FY26 estimates it's 38.6x, which is not.

The entire gap between those two numbers is execution risk — sitting mostly in FY27, where revenue is projected to jump 150% while the Zvezda contracts that carried FY25 are finishing.

Does FY26 land at ₹160 crore? It's the nearest testable claim in the whole document, and the first evidence of whether the projection curve is real.

How much of PAT is operating? Until the PBT-above-EBITDA gap is explained, the 48.7x P/E is being calculated on a profit number of uncertain quality.

Does the Zvezda revenue get replaced? Half the FY25 base ends by September 2026. Lifecycle support has to go from 9% of revenue to 80% to fill the hole.

When does the ₹52 crore of unbilled income get billed and collected? For a debt-funded working-capital story, this is the number that determines whether the model works.

Krasny owns things that are genuinely difficult to acquire: thirty years of vendor registrations, sole-source positions on Russian-origin spares, a leadership team that came out of the customer, and a clean balance sheet with 22% ROE. The business is real and the moat is real.

The multiple, though, isn't priced for the business as it stands. It's priced for the business as projected — and FY27 is where that gets settled.

If you're looking at this one, read the order book table and the pipeline table as two separate documents. One is a contract. The other is a hope. The gap between them is the whole investment case.

All figures are taken from the Krasny Defence Technologies Confidential Information Memorandum (SMC Capitals, January 2026, finalised 7 February 2026) and from UnlistedZone's company page as of 3 August 2026. Unlisted share prices are indicative levels compiled by the platform, not traded quotes or offers to deal. This note is information, not advice — unlisted shares carry liquidity, valuation and disclosure risks, and there is no guarantee of any IPO. Verify the primary filings and consult a SEBI-registered adviser before acting.