This study examines the financial impact of depreciation on the profitability of selected Indian defence companies, namely Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL), and Mazagon Dock Shipbuilders Limited (MDL), during the period 2020-21 to 2024-25. The Indian defence sector is highly capital-intensive, requiring large investments in fixed assets, where depreciation plays a critical role in shaping financial performance. A quantitative research approach is adopted, using secondary data and applying simple linear regression analysis through Microsoft Excel to evaluate the relationship between depreciation and net profit. The findings reveal a strong positive and statistically significant association, showing that higher depreciation corresponds with higher net profit in the selected companies. Regression results further indicate that depreciation explains a major portion of the variation in profitability, underlining the importance of fixed asset investment in driving financial outcomes. The study concludes that in capital-intensive industries such as defence manufacturing, depreciation reflects expansion and modernization rather than inefficiency, and effective utilization of assets substantially enhances profitability
Rathod et al. (2025) studied this question.