Paras Defence Shares Rally 10% on 50% Profit Surge in Q2 FY24
In a standout performance, Paras Defence and Space Technologies Ltd. saw its shares soar 10% after reporting a 50% year-on-year (YoY) jump in Q2 net profit to ₹14 crore (up from ₹9.3 crore in Q2 FY23).** The stellar results ignited bullish sentiment among investors, reflecting confidence in the company’s growth trajectory.
Q2 Financial Highlights: Robust Growth Across Metrics
- Revenue: Up 42% YoY to ₹72.3 crore (vs. ₹50.9 crore in Q2 FY23).
- EBITDA: Grew 44% YoY to ₹19.7 crore, with margins improving to 27.2% (from 26.8%).
- Order Book: Over ₹500 crore, ensuring strong revenue visibility.
The surge was driven by higher execution of defence and aerospace orders, supported by India’s ‘Atmanirbhar Bharat’ initiative.
3 Reasons Behind the Stock Rally
- Government’s Defence Focus: Policy push for indigenous manufacturing is boosting demand.
- Healthy Order Pipeline: Strong backlog in electronic warfare, avionics, and space systems.
- Global Defence Spending Rise: Geopolitical tensions are driving higher budgets, benefiting niche players like Paras Defence.
Analysts’ Outlook & Target Price
Brokerages maintain a ‘Buy’ rating, citing:
– Consistent execution and margin improvement.
– Expansion into high-margin segments like AI-driven defence solutions.
– Target price: ₹[X] (representing [X]% upside).
Key Risks to Monitor
- Dependence on Govt Contracts: Policy delays could impact revenue.
- Sector Competition: Rising rivalry from domestic and global defence firms.
Stock Performance & Next Triggers
The stock hit an intraday high of ₹[X], gaining [X]% in 6 months. Future catalysts include:
– New orders in defence/space.
– Export market expansion.
– R&D in unmanned systems.
Conclusion: A Multibagger in the Making?
With strong financials, policy tailwinds, and a solid order book, Paras Defence is well-positioned for growth. However, investors should track execution risks and sector dynamics.
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Disclaimer: This is not investment advice. Consult a financial expert before investing.
