Paras Defence shares up 56% in 5 days! What is driving the stock higher?
Paras Defence shares rose 18.85 per cent to hit a fresh all-time high of Rs 1,375.50 on BSE. The stock has climbed 56 per cent in five sessions and 74 per cent in the past one month, surpassing its 2021 peak in the process.
- Jun 18, 2024,
- Updated Jun 18, 2024 11:45 AM IST
Paras Defence and Space Technologies Ltd (Paras Defence) has seen its shares rallying 56 per cent in five sessions and 74 per cent in the past one month, surpassing its 2021 peak in the process.
The defence company recently attended a Virtual Investor Conference hosted by Nirmal Bang Institutional Equities, which was in the form of group meeting. The company was represented by Amit Mahajan, Director - Technical and R&D and Shilpa Mahajan - Wholetime Director.
Among the key takeaways, as per Nirmal Bang, was the management guidance of an absolute revenue of Rs 330 crore in FY25. The company expects its order book to be twice of its sales in the next few years, with a visibility period of 18 months.
As of May 28, the company had orders worth Rs 600 crore. The company expects an order book of Rs 2,500 crore by FY28-end, which will be 60 per cent of the total contracts rolled out.
On Tuesday, the Paras Defence stock rose 18.85 per cent to hit a fresh all-time high of Rs 1,375.50 on BSE. ADIA bought 5,60,875 Paras Defence shares at an average price of Rs 1,120.71 apiece on Friday, bulk deal data on NSE suggested. The stock market was shut on Monday.
It sees Rs 5-10 crore capex in FY25 and FY26 for expanding current facilities. Paras Defence is also exploring a partnership with Mitsubishi (Japan) for periscope systems. Japan presently buys periscopes from Thales (France), which represents a significant opportunity for Paras Defence.
Paras Defence's first periscope is expected to be delivered in June 2024, with an indigenous content of over 50 per cent. Each periscope is valued at Rs 30 crore. The company expects to deliver six new periscopes in FY25, totaling Rs 180 crore.
"Each submarine requires two periscopes. With India having 20 submarines and additional ones in the pipeline, there is a potential for orders worth 80 periscopes, including new and refurbished ones. Refurbishment costs are 80 per cent of the cost of a new periscope,' Nirmal Bang said.
The brokerage noted that the company is focused on adding ESM radars to periscope systems. Each ESM radar costs ~Rs100mn and is fully indigenised. "We maintain our valuation multiple and value the stock at 52 times FY26 EPS with a target price (TP) of Rs 916," Nirmal Bang said on June 11.
Paras Defence and Space Technologies Ltd (Paras Defence) has seen its shares rallying 56 per cent in five sessions and 74 per cent in the past one month, surpassing its 2021 peak in the process.
The defence company recently attended a Virtual Investor Conference hosted by Nirmal Bang Institutional Equities, which was in the form of group meeting. The company was represented by Amit Mahajan, Director - Technical and R&D and Shilpa Mahajan - Wholetime Director.
Among the key takeaways, as per Nirmal Bang, was the management guidance of an absolute revenue of Rs 330 crore in FY25. The company expects its order book to be twice of its sales in the next few years, with a visibility period of 18 months.
As of May 28, the company had orders worth Rs 600 crore. The company expects an order book of Rs 2,500 crore by FY28-end, which will be 60 per cent of the total contracts rolled out.
On Tuesday, the Paras Defence stock rose 18.85 per cent to hit a fresh all-time high of Rs 1,375.50 on BSE. ADIA bought 5,60,875 Paras Defence shares at an average price of Rs 1,120.71 apiece on Friday, bulk deal data on NSE suggested. The stock market was shut on Monday.
It sees Rs 5-10 crore capex in FY25 and FY26 for expanding current facilities. Paras Defence is also exploring a partnership with Mitsubishi (Japan) for periscope systems. Japan presently buys periscopes from Thales (France), which represents a significant opportunity for Paras Defence.
Paras Defence's first periscope is expected to be delivered in June 2024, with an indigenous content of over 50 per cent. Each periscope is valued at Rs 30 crore. The company expects to deliver six new periscopes in FY25, totaling Rs 180 crore.
"Each submarine requires two periscopes. With India having 20 submarines and additional ones in the pipeline, there is a potential for orders worth 80 periscopes, including new and refurbished ones. Refurbishment costs are 80 per cent of the cost of a new periscope,' Nirmal Bang said.
The brokerage noted that the company is focused on adding ESM radars to periscope systems. Each ESM radar costs ~Rs100mn and is fully indigenised. "We maintain our valuation multiple and value the stock at 52 times FY26 EPS with a target price (TP) of Rs 916," Nirmal Bang said on June 11.