Four fast-growing space stocks to add to your watchlist

As space becomes more accessible, opportunities for investors are skyrocketing. From satellite internet constellations to reusable rockets and lunar missions, private companies are now at the forefront of the new space race.

This surge in commercial activity has fuelled a corresponding boom in spacetech related stocks.

According to market research, the global space economy is projected to surpass $1 trillion by 2040, with private companies expected to play a dominant role in this explosive growth.

Space technologies also play an important role in a country’s defence capabilities and sovereignty, which is why the government encourages private sector participation.

We have curated a list of the four fastest-growing space stocks that are not only disrupting the industry but also showing strong financial momentum, innovation, and market positioning.

For investors seeking growth potential in a dynamic sector, identifying the top-performing space stocks can offer significant upside.

Let’s take a closer look at the top contenders fuelling the next era of space exploration and commercialisation.

#1 Apollo Micro Systems

Apollo Micro Systems Ltd is a pioneer in design, development, assembly and testing of electronic and electro-mechanical solutions.

Its offerings include electronic manufacturing services (EMS), PCB fabrication, embedded software design and development, circuit board assembly, hardware design services, concept-to-product development, host interface development, and custom-built electronic systems.

The company’s products are used across multiple industries including aerospace systems, ground defence, space, avionics systems, homeland security, and transportation.

It has over 700 onboard technologies and is actively involved in more than 150 indigenous programs.

The company has a manufacturing facility located in Hyderabad. It has a built-up area of 55,000 sq. ft. with a team of over 300 employees, including 150 employees in R&D.

Apollo Micro invests 7-8% of its revenues in R&D for developing and testing critical components under DRDO programs.

The company’s clientele includes high profile entities such as DRDO, Indian Army, Indian Navy, Adani, and L&T.

Coming to the financials, net revenue in 9MFY25 grew by 69.5%. Operating profit grew 69.1% in 9MFY25 with margins remaining constant at 23.3% compared to 23.4% in 9MFY24.

Going ahead, management is expecting significant contributions from artillery & bomb programs, and naval torpedo systems.

Shares of Apollo Micro Systems Ltd have returned 36% for the past 1 year on the back of strong operational performance.

#2 Bharat Electronics

Incorporated in 1954, Bharat Electronics Ltd manufactures and supplies electronic equipment and systems to the defence sector. The company also has a limited presence in the civilian market.

The company develops advanced electronic equipment, systems, and services for the Indian defence sector, including radar and fire control systems, weapon systems, communication, network centric systems (C4I), electronic warfare systems.

BEL also diversified its business by developing innovative products in sectors including homeland security, smart city solutions, space electronics, cyber security, software solutions, medical electronics, and systems alternate energy solutions.

The company derives 96% of its revenues from India and balance 4% from exporting its products to countries such as France, the US, Spain, Israel, China, Germany, ASEAN, Armenia, Sri Lanka, and others.

BEL has nine manufacturing units across India. The Bangalore and the Ghaziabad units are the two major units.

The company has entered MoU’s with Airports Authority of India, Delhi Metro, IISC, and UAS, opening opportunities for more civilian orders.

In FY25, Bharat Electronics Ltd clocked in a robust 17.3% growth in revenue YoY, making it the company's strongest annual performance to date. Ebitda also grew by 35.4% with margins improving substantially from 24.9% in FY24 to 28.7% in FY25.

Going ahead, the management reiterates confidence in achieving revenue growth of over 15% for next year, with EBITDA margins between 23%-25%.

Stock of the company has returned 34% over the past one year on the back of strong financial performance.

#3 Data Patterns (India)

Data Patterns (India) Ltd is one of the fastest-growing companies in the defence and aerospace electronics sector in India.

It is among the few vertically integrated defence and aerospace electronics solutions providers catering to the indigenously developed defence products industry.

The company has supplied products catering to all the platforms, viz., space, air, land and sea, including products for LCA-Tejas, Light Utility Helicopter, BrahMos missile.

Data Patterns’ product portfolio includes radars, underwater electronics/communication and other systems, electronic warfare suits, BrahMos programme, avionics, etc.

The company has developed 1,000+ building blocks that can be used on multiple end systems. Its manufacturing facility spans across 200,000 sq. ft. factory built on 8.56 acres of land in Chennai.

It has facilities for design, manufacturing, qualification, and life cycle support of electronic systems used in defence and aerospace applications.

The company derives 26% of its revenues from electronic warfare systems, 28% from radars, 28% from Avionics, 8% from FCS and balance 10% from others.

Data Patterns has reported a growth of 36.3% in its revenues for FY25, and profit after tax grew by 22.1% for the entire year. Ebitda margins deteriorated at 38.8% for FY25 versus 42.6% in FY24.

Going ahead, the management is optimistic about future growth, citing positive interactions with ministry of defence (MoD) officials regarding modernization processes and procurement activities.

Shares of Data Patterns (India) have returned negative 14% for the past one year on the back of poor performance on the operating margins front.

#4 MTAR Technologies

MTAR develops and manufactures components and equipment for the defence, aerospace, nuclear, and clean energy sectors.

The company was incorporated in 1970 by the promoters, PR Reddy, KSN Reddy and PJ Reddy, to cater to the technical and engineering needs of the Indian government in the post embargo regime.

MTAR manufactures liquid propulsion engines, cryogenic engine sub-systems, electro-pneumatic modules, satellite valves, grid fin structures, etc., for space launch vehicles, precision-engineered assemblies for various MNC aerospace companies.

The company derives 36% of its revenues from civil nuclear power segment, 28% from fuel cell & hydel, 9% from space segment, 2% from defence and the balance 22% from products and others. About 79% of its revenues are from export markets and balance 21% from the domestic markets.

It has eight manufacturing units, including an export-oriented unit (EOU) in Telangana. In FY24, it undertook capex to increase capacity, set up specialised fabrication facilities, and establish a new unit for the aerospace vertical.

MTAR boasts of a high-profile clientele, including global MNC’s such as Bloom Energy, Hitachi Zosen, Rafael Advanced Defence Systems, Worldwide Oil Machine, and Indian companies such as Nuclear Power Corp. of India, ISRO, DRDO, HAL, etc.

The company reported a decent 12.5% growth in revenue for 9MFY25 on the back of healthy order execution across segments. Ebitda, however, fell 8.2% with margins deteriorating to 17.6% in 9MFY25 from 21.6% in 9MFY24.

Going ahead, the management anticipates 30% revenue growth for FY26 and a similar growth trajectory for the next two years. The management projects Ebitda margins of 24% for FY26, 26% for FY27 and stabilising at 28% by FY28.

Shares of the company have returned negative 22% in the past one year on the back of sharp margin deterioration.

Conclusion

The space industry is no longer confined to exclusive government ventures. It’s now a high-growth, innovation-driven commercial sector poised to reshape global technology and infrastructure.

With projections indicating a $1 trillion space economy by 2040, investors have a unique opportunity to be part of a transformative industry still in its early phases of exponential growth.

The companies highlighted here represent distinct niches within the space and defence ecosystem, from advanced electronic systems and integrated warfare technologies to space vehicle components and satellite infrastructure.

These companies are not only aligned with national strategic goals but are also riding the tailwinds of increased private and public investment in space capabilities. Investors seeking exposure to India's booming spacetech space would do well to monitor these firms closely.

For investors having the foresight to have an allocation in a high-tech, strategically vital, and rapidly expanding sector, this industry is worth keeping on your watchlist.

Investors should remain vigilant, conducting thorough research and keeping abreast of market trends to ensure they make informed decisions.

Remember the challenges before diving headfirst.

Happy Investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

This article is syndicated from Equitymaster.com