Is DroneShield (ASX:DRO) Australia’s Chosen LAND 156 LoE Defence Play

Australia’s Flagship Defence Tech Champions

At the core of the DroneShield story, if investors have not already worked it out, is momentum.

For small and mid cap companies that are approaching profitability and beginning to cross the commercialisation threshold, market momentum often becomes the dominant force driving share price performance. DroneShield is a clear example of this dynamic. When execution lines up with improving fundamentals, investor interest can accelerate very quickly.
However, momentum cuts both ways.

It can amplify upside just as easily as it magnifies downside. We saw this play out when DRO’s share price ran too far ahead of underlying progress, followed by a sharp reversal that pushed the stock back below A$2. That pullback was a reminder of how quickly sentiment can turn in momentum driven names.

Now, with the stock climbing more than 100% from those lows, momentum is once again firmly in control. For investors, the key is recognising that while momentum can create outsized opportunities, it also increases volatility. Understanding where the company sits in its commercial journey, and how sustainable the underlying revenue trajectory is, matters just as much as the headline share price move.

This is why DroneShield continues to polarise opinion.

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Why did DRO move 9% today?

Today’s share price move, with the stock currently up around 9%, followed an announcement that DroneShield has been selected for the Australian Department of Defence’s Project LAND 156, Line of Effort 3, covering counter-UAS systems.

Importantly, this is not a single revenue generating contract. Instead, it is a pre-qualification framework that allows Defence and broader whole-of-government agencies to procure approved counter-drone solutions without needing to run a full open tender each time. In practical terms, this lowers friction in the procurement process and makes it easier for DroneShield’s products to be accessed across the Australian defence ecosystem (if they were to win contracts)

For investors, it is worth keeping expectations grounded. This announcement does not translate into immediate cash flows or guaranteed revenue. Droneshield still has to compete with other vendors who can bid for future work. What it does provide is access and opportunity. It positions DroneShield inside an approved procurement channel, which can materially improve the probability and speed of future contract wins.

They will need to fight it out within ASDEFCON tender processes to win anything.

The roughly 10% move today should therefore be viewed through the lens of momentum and forward expectations rather than near-term financial impact.

Positioned to Capture Australia’s A$1.3 Billion Counter-Drone Spend

The longer term opportunity for DroneShield is tied to the scale of funding now being directed toward counter-drone capability in Australia. The Australian Government has earmarked around A$1.3 billion over the next 10 years for counter-UAS systems, and DroneShield, alongside a small number of other providers with differentiated solutions, is well positioned to compete for this spend.

Being appointed to the panel creates a formal and repeatable pathway for DRO to supply its products and services across roughly 150 Defence bases and installations. Importantly, the scope extends beyond Defence to include non-Defence government sites such as critical infrastructure, ports, and law enforcement locations. This materially expands the addressable domestic market.

Over time, this framework increases the probability that existing trials and partner discussions convert into formal task orders, assuming competitive pricing and performance.

What this could mean for DRO

What investors should expect from this structure is not one large contract overnight, but a series of smaller, repeatable contract wins over time if DRO were to win contracts from the LAND 156 LoE. This mirrors what we have already seen in regions such as Europe, where customers continue to return as threat environments evolve and requirements expand.

Crucially, the framework also shortens deployment cycles. By reducing procurement friction, agencies can move more quickly from need identification to system deployment. Over time, this increases the likelihood that opportunities convert into cash flows faster than under traditional open tender processes, supporting a more consistent revenue profile if execution remains strong.