NIBE Ltd saw its shares rise up to 2% following a key regulatory approval that expands its footprint in India’s defence manufacturing sector. Its subsidiary, NIBE Defence and Aerospace Limited (NDAL), has received a manufacturing license from the Ministry of Home Affairs to produce firearms and ammunition, marking a strategic move into defence production.

The license covers pistols, rifles, machine guns, and key components, along with proof-testing services, positioning the company for long-term growth in the defence segment. This authorization enhances NIBE’s ability to participate in government defence projects and strengthens its credibility as a strategic supplier.

In line with its defence expansion, NDAL recently secured a ₹292.69 crore contract from the Indian Army for the supply of ground equipment, accessories, ESP, and ammunition for a universal rocket launcher system, to be executed over 12 months in phases.

However, NIBE Ltd continues to face operational challenges. Its Q2FY26 performance showed a sharp decline in revenue to ₹73.37 crore from ₹135.99 crore year-on-year, with a net loss of ₹9.69 crore compared to a profit of ₹8.89 crore last year. Operating profit also fell to a loss of ₹4.47 crore, with margins turning negative at -6.09%, reflecting lower volumes and weak operating leverage.

While regulatory approvals and defence orders signal strategic progress, near-term financial pressures highlight the challenges NIBE faces in balancing growth initiatives with operational performance.

Summary

NIBE Defence and Aerospace Limited, a subsidiary of NIBE Ltd, has obtained a firearms and ammunition manufacturing license from the Ministry of Home Affairs, enabling production of pistols, rifles, machine guns, and proof-testing services. The move complements a recent ₹292.69 crore Indian Army contract, strengthening NIBE’s position in the defence sector. Despite these strategic developments, NIBE Ltd’s Q2FY26 financials showed a revenue drop of 45% and a net loss of ₹9.69 crore, highlighting operational challenges alongside its long-term growth potential in defence manufacturing.

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