Paras Defence Shares Surge 10% on Securing ₹142 Crore DRDO Order
Paras Defence : Mumbai, India – Shares of Paras Defence and Space Technologies witnessed a sharp rise of nearly 10% intraday on Thursday, reaching an intraday high of ₹1,047.7 per share on the National Stock Exchange (NSE). The surge follows the company’s latest achievement—securing a ₹142.31 crore order from the Defence Research and Development Organisation (DRDO).
Paras Defence Bags Prestigious DRDO Order
In an exchange filing, Paras Defence announced that the order comes from CHESS (Centre for High Energy Systems & Sciences), a DRDO laboratory under the Ministry of Defence. The contract entails the development of a Laser Source Module and its integration with the Beam Control System (BCS) on a mobile platform.
The project is a crucial part of India’s High-Power Laser System, specifically designed for Anti-Drone and Anti-Missile applications. This development highlights India’s growing emphasis on indigenous defence technology and advanced warfare solutions.
Stock Market Performance
The counter opened with a gap-up of 2.22%, continuing its three-day winning streak, during which the stock has gained nearly 14%. Market analysts attribute this rally to the company’s expanding defence order book and its involvement in cutting-edge defence technology projects.
Paras Defence: Key Financial Metrics
Investors and analysts keenly track financial parameters to assess the company’s potential. Below is a breakdown of Paras Defence’s key financial ratios and market performance:
| Metric | Value |
|---|---|
| Market Capitalization | ₹4,084 Cr. |
| Current Share Price | ₹1,014 |
| 52-Week High/Low | ₹1,593 / 609 |
| Stock P/E Ratio | 81.3 |
| Book Value Per Share | ₹117 |
| Dividend Yield | 0.00% |
| Return on Capital Employed (ROCE) | 10.3% |
| Return on Equity (ROE) | 7.00% |
| Face Value | ₹10.0 |
| Promoter Holding | 57.0% |
| Price to Book Value Ratio | 8.70 |
| Debt-to-Equity Ratio | 0.15 |
| Pledged Percentage | 0.00% |
| Industry P/E | 76.5 |
| Graham Number | ₹190 |
| Intrinsic Value | ₹225 |
| Relative Strength Index (RSI) | 54.4 |
| Earnings Per Share (EPS) | ₹13.6 |
| No. of Equity Shares | 4.03 Cr. |
| PEG Ratio | 8.48 |
| 200-Day Moving Average (DMA 200) | ₹999 |
| Free Cash Flow (3 Years) | ₹-43.9 Cr. |
| Free Cash Flow (5 Years) | ₹-51.5 Cr. |
| Total Debt | ₹68.9 Cr. |
| Return on Assets | 5.18% |
| Price to Sales Ratio | 12.2 |
Why Is This Order Significant?
This DRDO order adds to Paras Defence’s portfolio of high-end defence and space technology solutions. The company specializes in precision optics, defence electronics, and futuristic defence systems, making it a key player in India’s Atmanirbhar Bharat (self-reliance) initiative.
The latest order also underscores the rising demand for counter-drone and missile-defence solutions amid increasing global security concerns. Several nations are investing heavily in anti-drone technology, making this a high-growth sector.
Investor Takeaway: Should You Invest?
- Positive Indicators: A growing order book, strategic government contracts, and involvement in high-tech defence projects bolster investor confidence.
- Challenges: The high P/E ratio (81.3) indicates a premium valuation, meaning the stock is expensive compared to earnings. Additionally, negative free cash flow suggests the company is investing heavily in its business.
- Long-Term Potential: With India’s increasing defence spending and emphasis on indigenous technology, Paras Defence is well-positioned for long-term growth.
Frequently Asked Questions (FAQs)
1. Why did Paras Defence shares rise by 10%?
Paras Defence stock surged after the company announced a ₹142 crore order from DRDO for developing a High-Power Laser System for Anti-Drone and Anti-Missile applications.
2. What is the significance of this DRDO order?
The order highlights India’s push for advanced defence technologies and strengthens Paras Defence’s position in the military tech sector.
3. What is the current stock price of Paras Defence?
As of today, the stock is trading at ₹1,014 per share, with a 52-week high of ₹1,593 and a low of ₹609.
4. Is Paras Defence a good investment?
Paras Defence has a strong market position and a growing order book, but its high P/E ratio (81.3) and negative free cash flow may concern some investors. It is best suited for long-term investors with a high-risk appetite.
5. What are Paras Defence’s key financials?
The company has a market cap of ₹4,084 Cr, ROCE of 10.3%, and ROE of 7.00%. It has a low debt-to-equity ratio of 0.15, indicating financial stability.
6. What are the future growth prospects of Paras Defence?
Given India’s rising defence budget and emphasis on indigenous defence production, Paras Defence is expected to secure more contracts in emerging defence technologies like counter-drone systems, laser weapons, and aerospace technology.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.