Defence Stock Soars 16% After Kotak MF Acquires 5% Stake

Rossell Techsys came into focus after Kotak Mutual Fund acquired a 5% stake in the small-cap aerospace and defence company, a transaction valued at nearly ₹166 crore.

Kotak Mutual Fund purchased more than 18.47 lakh shares at an average price of ₹900 apiece. Between July 31 and August 3, 2026, Rossell Techsys shares jumped 16% in two trading sessions. At the time of ET Money’s August 5 analysis, the stock was trading nearly 16% above Kotak Mutual Fund’s acquisition price.

The transaction puts the spotlight on a company whose revenue has more than doubled between FY24 and FY26, while its order book and strategic agreements are considerably larger than its latest annual revenue.

The growth, however, comes alongside elevated stock-market valuations.

Rossell Techsys operates across aerospace and defence

Rossell Techsys designs, develops and manufactures high-precision engineering products and aerospace systems for the defence and aerospace industries.

Its products include electrical wire harnesses, electrical panels and sub-assemblies supplied to domestic and international original equipment manufacturers, including Boeing, Lockheed Martin and Honeywell.

The company serves both civil and defence aviation markets and also has a presence in semiconductor, space and satellite businesses. It is expanding into commercial aerospace and the global maintenance, repair and overhaul ecosystem.

Rossell Techsys was separately listed following its demerger from Rossell India in 2024, although the underlying business has been operating since 2013.

Revenue nearly doubles in FY26 alone

Rossell Techsys reported a sharp acceleration in revenue during FY26.

Revenue stood at ₹217 crore in FY24 before increasing 20% to ₹260 crore in FY25. It then climbed 87% to ₹485 crore in FY26.

Operating profit increased from ₹32 crore in FY24 to ₹35 crore in FY25 and ₹63 crore in FY26.

The operating margin, however, did not expand alongside revenue. It stood at 15% in FY24 before settling at 13% in both FY25 and FY26.

Net profit followed a less linear path.

Profit declined from ₹11 crore in FY24 to ₹8 crore in FY25 before rising to ₹22 crore in FY26. The net profit margin consequently moved from 5% in FY24 to 3% in FY25 and returned to 5% in FY26.

Across FY24 to FY26, revenue more than doubled from ₹217 crore to ₹485 crore, while net profit increased from ₹11 crore to ₹22 crore.

₹800 crore order book adds to business visibility

Beyond its reported financial performance, Rossell Techsys had a confirmed order book of approximately ₹800 crore as of June 30, 2026.

The company also had nearly ₹3,000 crore of strategic agreements.

Together, these amounts are several times larger than the ₹485 crore of revenue reported for FY26.

The figures provide an indication of the scale of business currently under consideration or execution, although a confirmed order book and strategic agreements should not be treated as interchangeable. The timing and eventual revenue recognition from such business can depend on execution and contractual conditions.

Valuation remains elevated

The rise in the share price also brings Rossell Techsys’ valuation into focus.

At the time Kotak Mutual Fund made its investment, the company was trading at approximately 150 times earnings and close to 24 times book value.

The comparative data cited by ET Money also showed Rossell Techsys trading at a premium on several valuation measures.

On trailing 12-month figures, Rossell Techsys had a price-to-earnings multiple of 162 times and a price-to-book ratio of 25 times.

Apollo Micro Systems traded at 123 times earnings and 10 times book value, while Axiscades Technologies was at 599 times earnings and 17 times book value.

DCX Systems traded at 62 times earnings and two times book value, while NIBE stood at 123 times earnings and five times book value.

The profitability comparison looked different.

Rossell Techsys reported return on equity of 14%, compared with 9% for Apollo Micro Systems, 3% each for Axiscades Technologies and DCX Systems, and 5% for NIBE.

Its return on capital employed stood at 34%, against 15% for Apollo Micro Systems, 10% for Axiscades Technologies, 5% for DCX Systems and 10% for NIBE.

The figures show that Rossell Techsys combined higher profitability measures with a relatively expensive market valuation at the time of the comparison.

Kotak Mutual Fund scheme details were yet to be disclosed

While Kotak Mutual Fund acquired the 5% stake, ET Money noted that the specific mutual fund scheme or schemes in which the shares would be held were not known at the time of publication.

Those details were expected to become available through Kotak Mutual Fund’s monthly portfolio disclosures.

The transaction therefore establishes Kotak Mutual Fund’s acquisition but does not, on its own, disclose the fund house’s investment thesis or the individual schemes through which the exposure was taken.

Strong growth meets a demanding valuation

Rossell Techsys’ recent numbers present two sides of the story.

On the operating front, FY26 revenue reached ₹485 crore after an 87% increase, while net profit rose to ₹22 crore. The company also had an ₹800 crore confirmed order book and nearly ₹3,000 crore of strategic agreements as of June 30.

On the market side, the stock was valued at around 150 times earnings when Kotak Mutual Fund acquired its stake, leaving a substantial amount of expected future growth reflected in the valuation.

The 16% share-price rise following the transaction brought additional attention to the company, but institutional ownership by itself does not establish how a stock will perform from here.

For investors following Rossell Techsys, the next set of financial results, execution of its existing order book and strategic agreements, profitability and valuation remain measurable factors to track alongside Kotak Mutual Fund’s eventual portfolio disclosure.

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