Sunita Tools enters interim sales pact for artillery shells

Sunita Tools enters interim sales pact for artillery shells

Sunita Tools Enters Interim Sales Pact for Artillery Shells

Sunita Tools, an Indian manufacturer of precision engineering components, has entered an interim sales agreement to supply 155mm M107 artillery shell casings under a major defense contract. The company's subsidiary, Tripathi Aerotech & Weapons Systems (formerly Shigna Industrial Corporation), secured a Letter of Intent from an unidentified defense supplier for the production of 100,000 empty artillery shells annually, valued between $23 million and $35 million. The order, classified as a significant expansion into the defense sector, involves trial samples and low-volume deliveries from existing facilities while the company ramps up large-scale manufacturing within eight months.

The LOI specifies that the customer will accept trial samples and small batches during the interim period, with full-scale production expected to meet monthly delivery targets starting as early as possible. Sanjay Pandey, chairman and technical director of Sunita Tools, emphasized the strategic importance of the contract, noting the global shift toward increased artillery stockpiles and the potential for multi-year renewals and additional orders.

The company's stock surged 2% to ₹836 on the exchange following the announcement, reflecting investor optimism about its entry into the defense manufacturing sector. Sunita Tools reported robust financial performance in FY24, with standalone net profit rising 61.7% to ₹4.85 crore and revenue from operations growing 88.5% to ₹26.09 crore.

The contract underscores India's growing role in defense production, aligning with government initiatives to bolster domestic manufacturing. While the customer remains unnamed, the company highlighted the potential for export demand amid heightened global military spending.

This development positions Sunita Tools to capitalize on the expanding artillery shell market, leveraging its 36-year technical expertise and recent acquisition of Tripathi Aerotech. The interim sales framework provides a pathway to secure long-term contracts, subject to successful trial sample submissions and production scalability.

(https://www.business-standard.com/markets/capital-market-news/sunita-tools-hits-the-roof-after-arm-secures-major-defence-order-125010200341_1.html): Business Standard, Indian Defence News
(https://www.indiandefensenews.in/2025/01/sunita-tools-secures-major-defence.html): Indian Defence News, Militarnyi