Shares of Paras Defence and Space Technologies surged by 5% on September 30 after the company secured a significant order worth ₹293 crore. The order comes from Controp-Paras Technologies, a subsidiary of Paras Defence, and is part of a larger contract awarded by Larsen & Toubro (L&T) for the production of 244 units of the Sight–25HD EO System used in the Close-InWeapon System (CIWS) program. This contract also includes an extended warranty and integrated logistics support (ILS), with the order expected to be fulfilled over the next 47 months.
Recent stock performance and order impact
At 11:45 am, Paras Defence shares were trading at ₹1,115 on the NSE. The recent 5% surge reflects investor optimism following the ₹293 crore order win, which is a positive development amid the company's recent underperformance in the stock market. Over the past month, the stock has been down nearly 13%, largely due to profit booking across the defence sector, coupled with concerns over inflated valuations and slower growth rates.
Despite this dip, the new order has reignited interest in the stock, signalling that Paras Defence continues to secure lucrative contracts that could boost long-term prospects. For investors looking to invest in stocks, particularly in the defence sector, Paras Defence’s recent developments make it a stock to watch, especially with the government's focus on enhancing domestic defence production.
Strong financial performance in Q1
Adding to the positive sentiment around the stock is Paras Defence's impressive performance in the first quarter of FY24. The company's net profit nearly tripled to ₹14.85 crore, compared to ₹6 crore in the same period last year. Additionally, its revenue surged by 73% to ₹83.57 crore in Q1, up from ₹48.32 crore in Q1 FY23.
This robust financial growth, combined with the new order win, positions the company strongly in the defence sector. As a result, investors looking to invest in stocks tied to India's defence capabilities may find Paras Defence an attractive option, especially considering the government's push towards self-reliance in the defence sector.
Final thoughts
The ₹293 crore order won by Paras Defence signifies a strong growth trajectory for the company. With rising profits and significant contract wins, the stock could see continued interest from investors. While recent market corrections have affected its performance, the long-term outlook appears positive for those looking to invest in defence stocks.
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