Rolls-Royce Holdings plc (LSE: RR.) enters the week of 24 November 2025 in a very different mood from earlier this year. The share price has slipped into a technical correction after an explosive rally, yet the pipeline of civil aerospace, defence and power-systems news keeps getting stronger.
Today’s headlines span a cooling but still-elevated valuation, a fresh maintenance partnership with Emirates for A380 engines, an aggressive localisation push in India—from battle tanks to data centres—and new UK defence and nuclear policies that could shape the group’s long‑term earnings power.
Share price cools, but RR.L is still up almost 90% in a year
By late morning in London, Rolls-Royce shares were trading around 1,026.5p, down about 1.1% on the day. That puts the stock roughly 14% below its 52‑week high of 1,196p, set on 29 September 2025, even after an eye‑watering 88% gain over the past 12 months.
On current trailing numbers, the stock changes hands at about 15.2 times earnings, with a market capitalisation of roughly £87bn and a modest 0.72% dividend yield following the reinstatement of payouts and a £1bn buyback earlier this year.
In other words: Rolls-Royce is no longer the distressed turnaround of 2022–23. It’s now priced like a fully fledged blue‑chip growth and defence name—and that’s fuelling a debate about how much upside is left.
Valuation debate heats up: “out of tune with earnings” vs 15% upside
A new note from Simply Wall St published today argues that Rolls-Royce’s current share price may be “out of tune” with its earnings outlook. The analysis points out that the company’s price/earnings multiple is broadly in line with the broader UK market, but consensus forecasts actually expect earnings to shrink by mid‑teens percentages annually over the next few years, while the wider market is forecast to grow.
That disconnect leads the service to flag the risk that, after such a steep re‑rating, the stock could prove vulnerable if execution wobbles or if growth slows from its current breakneck pace.
Other voices are more upbeat. A fresh stock analysis from DirectorsTalk Interviews today highlights that RR.L remains firmly in favour with the analyst community, with the article pointing to:
- A market capitalisation of about $86bn (roughly in line with FT figures once FX is accounted for).
- A consensus skewed towards “Buy” ratings.
- An average target price implying around 15% upside from current levels, based on the piece’s compilation of broker estimates.
Separately, a note on Invezz describes Rolls-Royce as having “moved into a correction” after weeks of profit‑taking, even as the stock remains dramatically higher year‑to‑date.
Put together, today’s commentary paints a familiar picture for investors:
- Bulls see a structurally improved business—benefiting from pricing power in wide‑body engines, defence tailwinds and a leaner cost base—still trading below its long‑term potential.
- Sceptics worry that, after an almost nine‑fold recovery from the depths of the pandemic, expectations for margins and cash flow leave little room for disappointment.
Emirates deal: long‑term A380 engine support, new MRO model
In hard-news terms, one of the most important developments for Rolls-Royce around today is the deepening of its relationship with Emirates.
An article from AviTrader this morning confirms that Emirates has signed a new memorandum of understanding (MoU) with Rolls‑Royce under which the airline will:
- Build its own dedicated facility in Dubai to perform maintenance, repair and overhaul (MRO) on Trent 900 engines, which power its Airbus A380 fleet.
- Take “full rights” to conduct MRO on those engines from 2027, integrating the work into Emirates Engineering.
- Continue to rely on Rolls-Royce for complex module repairs and technical support, with the two companies extending TotalCare coverage for the Trent 900 fleet well into the 2040s.
A separate write‑up from Business Today summarising Emirates’ announcements at the Dubai Airshow lists the MoU with Rolls‑Royce among the day’s key aerospace partnerships.
From RR’s perspective, the significance is two‑fold:
- Enduring engine revenue, not lost business
While Emirates will undertake more work in‑house, Rolls-Royce remains embedded via TotalCare and specialised repair activity. That preserves high‑margin service revenue streams over decades, even as the airline gains more control over turnaround times and cost. - Strategic foothold in a fast‑growing MRO hub
By helping Emirates stand up a Trent 900 shop in Dubai, Rolls-Royce effectively anchors its MRO ecosystem in the Gulf, reinforcing its presence in a region that continues to invest heavily in long‑haul wide‑body aircraft and aerospace infrastructure.
It’s also a signal that Rolls-Royce’s post‑pandemic strategy—emphasising long‑term, data‑rich service contracts and collaborative MRO models—is alive and well.
India focus: tanks, data centres and deep localisation
1. Arjun tank engines and the Series 199 family
The sharpest piece of Rolls-Royce news today on the defence side comes from India.
According to Electronics For You, Rolls-Royce is awaiting final clearance from India’s Ministry of Defence to begin manufacturing engines for the Arjun main battle tank and a new generation of land combat platforms inside the country.
Key points from the report:
- Rolls-Royce has teamed up with two defence public‑sector undertakings (PSUs) to localise the MB838 enginefor the Arjun fleet.
- The company is also working on its Series 199 engine family for use in upcoming light tanks, future infantry combat vehicles (FICV), future ready combat vehicles (FRCV) and heavy military trucks.
- Executives told the publication that the firm is preparing for a full transfer of technology (ToT) for the Arjun engine—including intellectual property—so that assembly and most of the supply chain can be based in India.
- Rolls-Royce is separately advancing plans to localise its high‑end Series 4000 naval engines with an Indian industrial partner.
- The company highlighted that more than 1,400 of its engines already power Indian aircraft, tanks and naval vessels, underlining its long‑standing role in the country’s defence ecosystem.
For Rolls-Royce, this extends its role from exporter and service partner to local original-equipment manufactureracross land and naval platforms—an important evolution as India pushes hard on “aatmanirbharta” (self‑reliance) in defence.
2. Power Systems: non‑government business to overtake government by 2026–27
On the civilian side, Rolls-Royce’s Power Systems division is also putting India front and centre.
Two articles today—one from CEO Insights and another from ET BrandEquity—highlight comments by senior Rolls-Royce Power Systems executives that:
- The group expects its non‑government power-systems business in India to overtake government contracts by 2026–27.
- Historically, about 70% of the division’s India revenues came from government customers, but that mix is already shifting toward a roughly 50:50 balance this year, with non‑government business poised to reach about 60% of a larger total within a couple of years.
- Growth is being driven by data centres, semiconductor manufacturing sites and other mission‑critical industrial facilities that require high‑reliability backup power.
- Rolls-Royce’s MTU‑branded engines and gensets now have an installed base of more than 2,600 units in India, spanning naval and land defence, mining and commercial power generation.
- The company has relocated an entire factory from Germany to Pune, producing power‑generation and rail under‑frame engines for both India and export markets, with ambitions to double unit volumes over the next three years.
This dovetails with a broader narrative—also covered in Indian business press this week—that Rolls-Royce wants its non‑governmental power business to outgrow government supplies in India by tapping into foundational infrastructure for the digital economy.
For investors, the key takeaway is that India is evolving from a defence‑centric territory into a diversified growth engine across both public and private sectors.
UK defence review: continuous submarines and AUKUS underpin nuclear work
At home, Rolls-Royce’s defence prospects are being shaped by the UK’s Strategic Defence Review 2025 (SDR), which the House of Commons Library summarised in a briefing note published today.
Among a long list of recommendations, one stands out for Rolls-Royce:
The government has committed to continuous submarine production in the UK, backed by investments at BAE Systems in Barrow and Rolls-Royce in Raynesway, to allow the construction of one submarine roughly every 18 months and deliver a fleet of up to 12 AUKUS nuclear‑powered attack submarines.
Because Rolls-Royce is the UK’s sole supplier of submarine nuclear propulsion plants, this commitment effectively locks in multi‑decade demand for its reactors, engineering skills and nuclear‑fleet support services—subject, of course, to future budgets and political continuity.
The same briefing references large planned investments in the UK’s nuclear deterrent warhead programme and munitions production, alongside a push for “wartime pace” innovation and closer industry partnerships.
Taken together, this strengthens the backdrop for Rolls-Royce’s Defence and New Markets (nuclear) segments:
- Submarine‑reactor work in Barrow and Raynesway.
- Broader nuclear‑skills investment via initiatives such as the Rolls-Royce Nuclear Skills Academy.
- Participation in the AUKUS SSN programme, where Rolls-Royce will play a central propulsion role.
Nuclear regulation “radical reset”: a double‑edged backdrop for SMRs
Also landing today is a high‑profile report from the UK government’s nuclear regulatory taskforce, covered by both NucNet and The Guardian.
The review concludes that:
- The UK has effectively become the most expensive place in the world to build nuclear power stations, due largely to complex, fragmented regulation and planning processes.
- It calls for a “radical reset” of rules, including a single nuclear regulator and streamlined environmental and planning regimes to speed up and de‑risk projects.
While the report doesn’t focus on any single company, it is directly relevant to Rolls-Royce’s small modular reactor (SMR) ambitions, given the company leads one of the UK’s flagship SMR designs and has been selected as the preferred vendor for a new wave of reactors at sites such as Wylfa in north Wales.
If the recommended regulatory simplifications are implemented without compromising safety, they could:
- Improve project economics for SMRs by cutting financing and construction risk.
- Shorten timelines for first‑of‑a‑kind deployments.
- Make it easier for the UK to export regulatory frameworks alongside British technology.
But until concrete changes are legislated and tested, regulatory uncertainty remains a risk factor for the New Markets division.
Trading update: guidance intact after strong year-to-date performance
Beyond today’s headlines, investors are still digesting Rolls-Royce’s trading update of 13 November 2025, which set the tone for the latest leg of the rally.
In that update, CEO Tufan Erginbilgiç said strong performance across the group had reinforced confidence in full‑year 2025 guidance, with management targeting:
- Underlying operating profit between £3.1bn and £3.2bn.
- Free cash flow between £3.0bn and £3.1bn, despite ongoing supply‑chain challenges.
The statement highlighted:
- Civil Aerospace: Large engine flying hours for the first 10 months of the year reached around 109% of 2019 levels, supported by robust long‑haul traffic and new orders for Trent‑powered aircraft, including the Airbus A350F and wide‑body orders from carriers in Asia and the Middle East.
- Defence: Continued momentum in military engines and submarine work, with support contracts such as the EJ200 engine agreement for the RAF’s Typhoon fleet adding long‑term visibility.
- Power Systems: Solid demand for large engines and distributed power solutions, particularly from data centres and government clients—a trend now clearly visible in today’s India news flow.
This comes on top of a multi‑year turnaround that saw Rolls-Royce raise its 2025 profit and cash‑flow guidance after a strong first half, and resume dividends plus a £1bn buyback earlier this year.
How today’s news fits the bigger Rolls-Royce story
For investors and industry watchers, the 24 November 2025 news cycle does not radically alter the Rolls-Royce investment case—but it does sharpen several key themes:
- From turnaround to growth‑at‑a‑price
- The stock is no longer cheap by historic standards, and today’s valuation‑focused commentary underlines that expectations for margins and cash flow are now demanding.
- Any slip‑up on execution, or a slowdown in civil aerospace or defence, could trigger sharper corrections.
- Civil aerospace still compounding through services
- The Emirates Trent 900 MRO deal extends revenue visibility well into the 2040s, reinforcing the importance of aftermarket and TotalCare contracts to the Rolls-Royce model.
- India as a multi‑leg growth platform
- On one side, the Arjun tank and Series 199 localisation push anchors Rolls-Royce deeper into India’s land and naval defence supply chains.
- On the other, the power‑systems business is pivoting towards booming private‑sector demand from data centres and semiconductor plants, with relocated manufacturing capacity in Pune positioned to serve both India and export markets.
- Defence and nuclear policy tailwinds
- The UK’s commitment to continuous submarine construction and AUKUS delivery plans effectively extends Rolls-Royce’s nuclear propulsion franchise for decades, albeit with the usual caveats around politics and budgets.
- Moves to simplify nuclear regulation could, if implemented, improve the economics of SMR deployment, where Rolls-Royce is one of the leading players.
- Execution remains the crux
- Rolls-Royce’s transformation under Erginbilgiç has already produced one of the UK market’s most dramatic turnarounds, with shares vastly outperforming the FTSE 100 since 2023.
- From here, the challenge is more subtle: continue delivering on guidance, manage supply‑chain pressures, ramp up complex projects in India and the Gulf, and navigate evolving nuclear regulation—all while justifying a far richer valuation than the company commanded only a few years ago.
Bottom line
On 24 November 2025, Rolls-Royce finds itself at an inflection point:
- The share price has stepped back from its highs but remains elevated after a spectacular recovery.
- Fresh deals—like the Emirates Trent 900 MRO agreement—underline the resilience of its civil‑aerospace franchise.
- India is emerging as a critical pillar of both defence and power‑systems growth, with deep localisation and technology transfer at its core.
- UK defence and nuclear policy now provide clearer long‑term demand signals for submarines and reactors, even as regulators ponder how to make nuclear cheaper to build.
For long‑term followers of RR.L, today’s news flow doesn’t change the story so much as add more detail to a familiar picture: a once‑troubled engineering giant, mid‑way through a high‑stakes transformation, now priced like a premium asset and working hard to grow into that valuation.
Note: This article is for information and general news purposes only and does not constitute investment advice. Always do your own research or consult a qualified adviser before making investment decisions.
