The seven new companies carved out of the erstwhile Ordnance Factory Board (OFB) have hit a new record export high of ₹3,545 crore as well as healthy profitability, in a significant turnaround from four years ago when they underwent a landmark corporatisation process.
Prior to the reforms, the factories were struggling and had a net loss of ₹2,844 crore, with little money available for research and development or exploration of foreign markets. However, the latest financial figures show that in FY25, the factories have recorded a net profit of ₹1,625 crore.
With the corporatisation process seeing success, the factories have now been told to increase spending on development of new weapons and ammunition, which has remained at below ₹250 crore. Sources said defence minister Rajnath Singh has suggested that the R&D budget needs to be doubled for the factories to stay competitive.
While profitability has hit a new high, the real growth story has been exports, with all seven factories concentrating on developing new markets. In 2019-20, the combined exports of the entities was limited to ₹81 crore. Provisional numbers available for 2024-25 show that exports have now zoomed past ₹3,545 crore.
Munitions India Limited (MIL) is leading the pack when it comes to exports and accounts for nearly ₹3,000 crore exports in the past financial year. It is followed by Yantra India, the Nagpur-based entity which had initially been tasked to make ancillary equipment for other factories.
The corporatisation process was carried out in 2021 with Singh being closely involved in the restructuring, which was seen as a mammoth task, given legacy issues and strong unions present at the factories.
