Step 1 — Drone Anatomy
What Goes Inside a Drone?
Think of a drone as a flying robot. Just like a car has an engine, gearbox, steering, and fuel tank — every part has a specific job. Here's every component, explained simply.
Frame (Chassis)
Like the human skeleton
Everything mounts onto the frame. Made from carbon fibre or aluminium. Garuda's Kisan Drone frame is manufactured in India at their Chennai facility.
Motors (4–8 per drone)
Like a car engine — multiplied
Brushless DC motors spin the propellers. If even one fails, the drone crashes. An agri drone uses 4–6 motors. Currently imported mostly from China.
Propellers (Blades)
Like helicopter blades
Spinning propellers push air downward to create lift. Made from plastic or carbon fibre. Increasingly being manufactured within India.
Flight Controller (The Brain)
Like a car's onboard computer
Calculates 400+ times per second which motor should spin how fast to keep the drone stable. Runs on microchips — currently imported. This is India's biggest bottleneck.
ESC — Electronic Speed Controller
Accelerator pedal for each motor
The Flight Controller sends a command — "give this motor 80% speed" — the ESC executes it. One ESC per motor = 4–6 ESCs per drone. Mostly imported.
Battery (LiPo / Li-ion)
Like the fuel tank
High-density lithium battery. An agri drone flies only 7–15 min because it carries 8 kg of liquid + its own weight. Garuda opened its own battery factory in Chennai, January 2026.
GPS + Sensors
Like Google Maps + eyes
GPS tells the drone where it is. Barometer measures altitude. Obstacle sensors detect trees and power lines. Chips imported; integration done in India.
Camera / Payload Sensors
The drone's eyes
RGB for photography, multispectral for crop health, thermal for night ops. High-end sensors sourced from China and Japan — ~65% of imaging components imported.
Spray System (Agri only)
Like a tractor's pump and nozzles
8-litre tank, pump, flow sensors, and 4–6 nozzles for uniform pesticide coverage. Garuda designs and manufactures this in-house — it's a core IP advantage.
Radio Link / Communication
Like a walkie-talkie
2.4–5.8 GHz radio link between the pilot's controller and the drone. Range: 500m–5 km. Chips imported; assembly and integration done in India.
Software / Firmware / AI
The drone's operating system
Garuda builds its own AI/ML software with Tata Elxsi — crop detection, auto-routing, field mapping. 100% made in India. A key competitive moat.
Ground Control Station
The pilot's cockpit on the ground
Laptop + software where the pilot plans flight paths, monitors live data, and reviews spray logs. Garuda's own proprietary platform.
Step 2 — Supply Chain
What Do They Make vs. What Do They Import?
Garuda's CEO has stated publicly: "Currently 40–45% of components are imported — target is 85% indigenisation within 3–5 years." Here is the full breakdown.
| Component | Source | Why |
|---|---|---|
| Drone Frame (carbon fibre) | 🇮🇳 Made in India | Manufactured at Garuda's Chennai facility. Basic structural work is feasible in India. |
| Propellers | 🇮🇳 Made in India | Plastic moulding — Indian vendors are available and cost-competitive. |
| Spray System (tank, pump, nozzles) | 🇮🇳 Garuda in-house | Custom-designed precision spray system — core IP. Garuda's agri advantage over DJI. |
| Software / AI / Firmware | 🇮🇳 India — Garuda + Tata Elxsi | Completely indigenous. Creates a data and analytics moat that pure hardware companies lack. |
| Battery Pack | 🔄 Transitioning | New Chennai battery factory opened Jan 2026. Cells still sourced externally for now. |
| Motors (Brushless DC) | 🇨🇳 Imported — China | China produces motors far more cheaply and precisely. India currently lacks capacity. |
| ESC (Electronic Speed Controller) | 🇨🇳 Imported — China | Complex power electronics requiring specialised fabs not yet available in India. |
| Flight Controller (Microchip) | 🇨🇳 🇺🇸 Imported | Advanced microprocessors — semiconductor fabs don't exist at scale in India. TSMC/Qualcomm chips. |
| GPS Module | 🇨🇳 Imported | Precision GPS modules (u-blox) — no domestic alternative at required spec. |
| Cameras (RGB, Multispectral) | 🇨🇳 🇯🇵 Imported | ~65% of imaging components still imported. Sony and Omnivision sensors dominate. |
| Thermal / LIDAR / Radar (Defence) | 🇺🇸 🇮🇱 Imported | Defence-grade sensors for Trishul drone — US and Israel. No domestic alternative. |
| Radio Transceivers | 🔄 Partial | Chips imported; PCB assembly and system integration done at Garuda's India facility. |
⚠️ Key Risk: Motors, ESCs, and flight controller chips all come from China. If China restricts exports (as has happened with semiconductors), Garuda's production lines could stall. This is why India's drone indigenisation policy matters — and why Garuda's battery factory is strategically important.
✅ Garuda's Moat: The spray system design, software/AI stack, pilot training ecosystem, and DaaS service delivery are all built in India. DJI does not have anything close to this depth of agricultural infrastructure on Indian soil.
Step 3 — Inside the Factory
How Is a Drone Assembled?
Garuda operates a 24,000 sq. ft. manufacturing facility in Chennai. In 2025, a second facility was added — effectively doubling production capacity. Here is how one drone goes from raw parts to a finished, flyable product.
📦
Component Sourcing
Order motors, chips, sensors — China lead time: 20–30 weeks
🏗️
Frame Manufacturing
Carbon fibre cut and shaped at Chennai facility
🔧
Electronics Assembly
Mount motors, wire ESCs, connect flight controller
💻
Software Flash
Garuda's firmware and AI algorithms loaded onto flight controller
✅
Testing & QA
Indoor + outdoor test flights. AS9100 aerospace quality checks
🚚
Delivery
To buyer directly, or into Garuda's own DaaS fleet
1
Component Sourcing
Order motors, chips, sensors — China lead time: 20–30 weeks
2
Frame Manufacturing
Carbon fibre cut and shaped at Chennai facility
3
Electronics Assembly
Mount motors, wire ESCs, connect flight controller
4
Software Flash
Garuda's firmware and AI algorithms loaded onto flight controller
5
Testing & QA
Indoor + outdoor test flights. AS9100 aerospace quality checks
6
Delivery
To buyer directly or into Garuda's own DaaS fleet
Garuda's indigenisation progress
Currently made in India (FY25)
~55%
Target by FY28
~85%
Currently imported
~45%
Step 4 — FY25 Financials (Actual RoC Filing)
The Real Numbers From Their Books
All figures below are sourced directly from Garuda Aerospace's Standalone Financial Statements for FY2024–25 (01/04/2024 to 31/03/2025) filed with the Registrar of Companies. Values in ₹ Crore.
Total Revenue
₹124.8 Cr
↑ 12.7% vs FY24
Revenue from Ops
₹117.7 Cr
↑ 7.0% vs FY24
EBITDA
₹28.2 Cr
Margin: 20.3%
Net Profit (PAT)
₹17.3 Cr
PAT margin: 14.7%
Total Expenses
₹100.9 Cr
↑ 12.8% vs FY24
Employees (FY25)
133
As of 31 Mar 2025
Statement of Profit & Loss — FY25 vs FY24 (₹ Crore)
| Line Item | FY25 | FY24 | Change |
|---|---|---|---|
| REVENUE | |||
| ↳ Sale of Products (Drones & accessories) | 59.8 | 42.5 | +40.7% |
| ↳ Sale of Services (DaaS / Surveillance) | 56.2 | 67.4 | −16.6% |
| ↳ Other Operating Revenue | 1.7 | 0.1 | +3,155% |
| Total Revenue from Operations | 117.7 | 109.9 | +7.0% |
| ↳ Other Income (interest, forex, misc) | 7.1 | 0.8 | +773% |
| Total Revenue | 124.8 | 110.8 | +12.7% |
| EXPENSES | |||
| ↳ Cost of Materials Consumed | 72.5 | 50.2 | +44.5% |
| ↳ Changes in Inventories (stock build-up) | −16.6 | −1.2 | — |
| ↳ Employee Benefit Expense | 9.6 | 10.6 | −9.5% |
| ↳ Finance Costs (interest) | 1.2 | 1.9 | −40.1% |
| ↳ Depreciation & Amortisation | 3.1 | 2.0 | +57.0% |
| ↳ Other Expenses (travel, ads, legal, etc.) | 31.2 | 25.5 | +22.2% |
| Total Expenses | 100.9 | 89.4 | +12.8% |
| Profit Before Tax (PBT) | 23.9 | 21.3 | +12.3% |
| ↳ Less: Tax Expense | 6.7 | 5.5 | — |
| Net Profit / PAT | 17.3 | 15.8 | +9.2% |
Revenue Mix FY25 (₹117.7 Cr)
Cost Mix FY25 (₹100.9 Cr)
Revenue from Operations
Net Profit (PAT)
What the Numbers Actually Tell Us
| Insight | Data Point | Implication |
|---|---|---|
| Hardware surging, Services dipping | Products: +41%. Services: −17% | Drone sales bouncing back (subsidy push) but service revenue slipped — possibly project delays or competition in DaaS |
| Material cost is the biggest pressure | ₹72.5 Cr — 72% of total expenses | China-imported components rising fast. Every ₹1 of rupee depreciation vs USD directly hurts margins. Indigenisation is mission-critical. |
| Inventory built up aggressively | −₹16.6 Cr inventory build vs −₹1.2 Cr FY24 | They're producing/buying far more than selling. Could indicate pipeline of large orders ahead — or working capital risk if demand softens. |
| Debt almost paid off | Finance costs down 40% to ₹1.2 Cr | Long-term debt: ₹0.48 Cr. Short-term: ₹6.2 Cr. Clean balance sheet — well-positioned for IPO. |
| Other income jumped 773% | ₹7.1 Cr vs ₹0.8 Cr FY24 | Likely includes government grants, forex gains, or one-time items. Inflates total income — operating revenue tells the real story. |
| Ad spend rising fast | Advertising/Promo: ₹11.3 Cr (↑70%) | Heavy spend on brand/marketing — MS Dhoni campaigns, Aero India presence, DaaS customer acquisition. Investment phase, not waste. |
| Trade receivables high | ₹114.8 Cr — 97% of annual revenue | Almost 1 year of revenue sitting unpaid. Government/PSU customers tend to pay slowly. This is the single biggest working capital red flag. |
⚠️ Biggest Red Flag from the Filings: Trade receivables of ₹114.8 Cr against revenue of ₹117.7 Cr means nearly a full year of sales is outstanding. Auditors also flagged delays in depositing statutory dues (GST, PF, ESI). For a pre-IPO company, these are items SEBI will scrutinise closely.
Step 5 — Business Model
How Does Garuda Make Money?
Garuda is not just a drone manufacturer — it runs a three-sided business. Think: a company that builds cars, also runs an Ola-style service, AND operates a driving school — all in drones.
Model 1: Sell the Drone
One-time hardware transaction — ₹59.8 Cr in FY25
A farmer or company buys the drone outright. Price: ~₹5–12 lakh per agri drone. Government SMAM subsidies cover 40–50%. Garuda gets quick cash but the relationship typically ends there.
Model 2: Drone as a Service (DaaS)
Recurring service contracts — ₹56.2 Cr in FY25
Customer pays for outcomes, not hardware. "Spray my 100 acres." Garuda sends its drone and pilot. Charged ~₹300–500/acre. NTPC, IOCL, NHAI — all on this model. Note: this segment dipped in FY25 — a concern.
Model 3: Pilot Training (RPTO)
Course fees + pilot supply flywheel
DGCA-certified training costs ₹50,000–1,00,000 per student. These pilots then staff Garuda's DaaS fleet — a powerful flywheel that keeps operating costs lower than hiring from the open market.
💡 Why DaaS Is the Real Prize: With DaaS, the customer doesn't need to understand drones — they just pay for results. This is recurring revenue like a subscription. Yet in FY25, DaaS services actually declined 17% to ₹56.2 Cr, while hardware sales grew 41%. This reversal is the key question for Garuda going into its IPO — can DaaS recover and re-accelerate?
Step 6 — Customer Segments
Who Buys From Garuda, and Why?
Farmers (Agriculture)
Largest segment — ~55% India market share
1 agri drone = 1 acre in 7 minutes vs. 2 hours by hand. 500+ spray orders via PM Modi's Drone Didi initiative. Government subsidies make it affordable. This is Garuda's core volume driver.
Government & PSUs
High-value, long-duration contracts
NTPC — power plant inspection. IOCL — refinery surveillance. NHAI — highway mapping. Survey of India — PM SVAMITVA land records. Stable but slow-paying (hence the receivables problem).
Defence
Nascent today, massive tomorrow
Trishul border-patrol drone for armed forces. Govt allocated ₹9,400 Cr for indigenous drone defence in FY26. Garuda's Thales partnership (UTM drones) is aimed squarely at this segment.
Large Corporates
Industrial DaaS clients
Tata, Adani, L&T for infrastructure inspection. Flipkart and Swiggy for delivery trials. None own drones — all use the DaaS model. High contract values, sticky relationships.
Summary
The One-Line Explanation
🚁 Garuda Aerospace = Tata Motors + Ola + Driving School — all built around drones
Like Tata Motors — designs and builds its own products (frame, spray system, AI software)
Like Ola — runs a drone-cab service (DaaS); the drone is Garuda's, the pilot is Garuda's, customer pays per use
Like a Driving School — trains DGCA-certified pilots who then staff its own service fleet
On the supply chain: The brain (chips) comes from China. The body (frame, spray system) is made in India. The soul (software, service) is 100% Indian. And slowly, even the brain is coming home — the battery factory is step one.
The FY25 warning sign: DaaS revenue fell 17% while receivables piled up to ₹114.8 Cr. For a company chasing a ₹1,000 Cr IPO, resolving these two issues is the most important pre-listing task.
Like Ola — runs a drone-cab service (DaaS); the drone is Garuda's, the pilot is Garuda's, customer pays per use
Like a Driving School — trains DGCA-certified pilots who then staff its own service fleet
On the supply chain: The brain (chips) comes from China. The body (frame, spray system) is made in India. The soul (software, service) is 100% Indian. And slowly, even the brain is coming home — the battery factory is step one.
The FY25 warning sign: DaaS revenue fell 17% while receivables piled up to ₹114.8 Cr. For a company chasing a ₹1,000 Cr IPO, resolving these two issues is the most important pre-listing task.