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Paras Defence and Space Technologies Ltd. made waves in the stock market today as its shares soared over 7% to reach ₹1,040.35 per share on January 7. The surge came after the company announced a key development—securing a license under the Arms Act 1959. The stock, which saw an early trading spike of up to 10%, has captured the attention of those looking to invest in stocks with high-growth potential, despite being 40% below its all-time high of ₹1,592.7.

The newly granted license, issued by the Department for Promotion of Industry & Internal Trade (DPIIT), allows Paras Defence to manufacture advanced light machine guns (LMGs)—MK-46 and MK-48 belt-fed models. With an annual production capacity of 6,000 units each and lifetime validity, this development positions the company as a significant player in India’s defence manufacturing ecosystem. 

A strong track record in defence and financial performance

Paras Defence has consistently demonstrated its ability to secure high-value projects in the defence space. Last November, the company won a ₹61.43 crore order from the Instruments Research and Development Establishment (IRDE), part of the Ministry of Defence. The project involved upgrading the Optronic Periscope Sight for Indian Naval submarines, further highlighting the company’s technical expertise.

This strong operational performance is reflected in its financials. In Q2 FY2025, Paras Defence reported a 45% year-on-year jump in net profit, reaching ₹12.70 crore compared to ₹8.76 crore in the same period last year. The EBITDA margin also expanded to 26.1%, up from 25.3%. Such robust growth makes it a compelling option for investors exploring opportunities to invest in stocks tied to innovation and government-backed sectors.

A record-breaking IPO that cemented its market credibility

Paras Defence’s journey to market leadership began with its blockbuster IPO in September 2021. As one of India’s most subscribed IPOs, it garnered bids worth over ₹38,000 crore and a subscription rate exceeding 300 times. This extraordinary demand demonstrated the market’s confidence in Paras Defence as a prime candidate for those looking to invest in stocks with long-term potential.

Why should investors consider Paras Defence?

For those planning to invest in stocks, especially in the defence sector, Paras Defence offers an enticing opportunity. With its new license to manufacture modern light machine guns, the company is poised to meet both domestic and global demand. Additionally, the government’s push for indigenisation and reduced import dependency aligns perfectly with Paras Defence’s capabilities and ambitions.

The company’s strong order book, innovative defence solutions, and expanding financial performance make it an attractive option for individuals and institutional investors alike. If you are looking to invest in stocks of companies contributing to India's defence self-reliance, Paras Defence could be a promising addition to your portfolio.

A bright future ahead

The recent 7% rise in Paras Defence shares reflects growing investor confidence and market optimism. For those keen to invest in stocks with solid growth potential, Paras Defence offers a compelling case. With its technical expertise, robust financials, and strategic vision, the company is set to play a pivotal role in shaping India’s defence sector, making it a stock worth watching—and investing in.