With defence sector evoking renewed interest because of twin factors of increased spending and global tensions, this could be a perfect time to add these stocks to one’s portfolio.
Titomic Limited (ASX: TTT)
Titomic Limited (ASX: TTT) a global leader in additive manufacturing and cold spray technology, has released its financial results for the half-year ended 31 December 2024. The company achieved significant growth, including a successful capital raise of AUD 30 million, strategic expansion in Huntsville, Alabama, and leadership reinforcement, which will fuel its U.S. expansion and global growth. The company secured over USD 577K in aerospace and defense purchase orders, contributing to a total of more than AUD 1 million in project orders. This momentum is reinforced by expanding cold spray adoption across multiple industries, including defense, academia, and industrial sectors.
Titomic’s innovation continues to drive its industry leadership. The company has made significant advancements in technology with the development of augmented reality solutions for low-pressure cold spray (D523) and a prototype cold spray backpack solution. Additionally, Titomic is actively contributing to the establishment of industry standards, such as the DNV ProGRAM for oil and gas applications and the co-development of AMS 7057, the next-generation aerospace cold spray standard. These advancements solidify Titomic's role as a pioneer in advanced additive manufacturing and cold spray technology. Customer sales revenue surged 61% YoY, reaching AUD 3.7 million for the half-year, underlining the company's growing traction.
Titomic is set for further growth with a solid balance sheet, having AU$24.1 million in cash at December 2024. The company’s outlook for FY2025 is optimistic, expecting significantly higher revenues compared to the previous year’s AUD 5.9 million. With a strategic shift towards service-based business models, Titomic plans to move from R&D projects to bigger multi-year production and service contracts. In the long term, the company has set ambitious targets of reaching $750M global sales in 2030 and an EBITDA margin in excess of 50% in the same year.
DroneShield Ltd (ASX: DRO)
DroneShield Ltd (ASX: DRO) has recorded impressive growth, with its revenue surging from under $1 million in 2018 to $57.5 million in 2024, marking the highest revenue in the company’s history. Even though there was a modest 6.4% year-on-year increase, the core business, fueled by smaller regular deals, experienced strong growth. The business had a strong beginning to 2025, with $52 million of revenue received or committed for the year, in addition to a $215.2 million cash balance. This financial strength allows DroneShield to continue investing in its business, especially as the demand for counter-drone solutions rises due to increasing geopolitical tensions and the evolving nature of warfare.
DroneShield leads the development of counter-unmanned aircraft systems (C-UxS), a rapidly growing sector in modern warfare. Drones are becoming more autonomous and capable of complex missions, pushing militaries to adopt sophisticated technologies for neutralising these threats. DroneShield is developing next-generation systems powered by cutting-edge software. The company’s solutions cater to a variety of needs, from jamming and disrupting enemy operations to providing advanced countermeasures for military applications. This places DroneShield in a strong position as demand for these technologies continues to escalate globally.
The expansion of the company is not only in terms of its products but also its staff and infrastructure. DroneShield’s team has grown to 275 employees, with 204 engineers dedicated to advancing its technologies. It is also expanding its Sydney facility to support an annual manufacturing capacity of up to $500 million. This focus on innovation is evident in DroneShield’s strong pipeline, which is valued at $1.2 billion, driven by ongoing customer interest and significant contracts. As the business continues to expand its AI and electronic warfare expertise, DroneShield is positioning itself for long-term growth in a rapidly growing high-demand market.
(Source: Company's Report)
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