Paras Defence shares slip 9% from recent 52-week high; should you buy?

Shares of Paras Defence and Space Technologies Ltd slipped 6.93 per cent in Thursday's trade to hit a low of Rs 969. At this level, the stock has fallen 9.10 per cent from its one-year high of Rs 1,066, seen in the previous trading session.

The correction comes after a sharp rally in the defence counter, which has gained around 44 per cent on a year-to-date (YTD) basis.

Ravi Singh, Chief Research Officer at Master Capital Services, said, "Paras Defence continues to attract strong investor interest as India increases its focus on defence manufacturing and import substitution. The company has built a solid presence in defence electronics, optics, space technology and surveillance systems. Recently, Paras Defence received a major order from DRDO for an advanced optical air defence system, which further strengthened market sentiment around the stock."

He added, "The company is also expected to benefit from the government's Make in India push and rising defence spending in the coming years. Although valuations have become expensive after the sharp rally in defence stocks, investors remain positive on the long-term growth potential due to healthy order inflows and increasing opportunities in India's domestic defence ecosystem."

From a technical standpoint, a few analysts indicated that the stock may witness some consolidation after its recent surge.

Osho Krishan, Chief Manager – Technical & Derivative Research at Angel One, noted, "Paras has seen a spectacular move post its breakout above the Rs 930-odd zone. Currently, the parameters are stretched a bit and might correct towards the neckline. The temporary halt is considered healthy as the primary trend remains robust from a medium-term perspective."

AR Ramachandran, Sebi-registered research analyst at Tips2trades, said, "The stock is bearish on daily charts with strong resistance at Rs 1,067. A daily close below the support of Rs 961 could trigger a fall towards Rs 809 in the near term."

Meanwhile, Virat Jagad, Senior Technical Research Analyst at Bonanza, maintained a positive outlook on the counter.

He stated, "Paras Defence exhibits a powerful parabolic uptrend, surging past multi-month highs on heavy supportive volume. While a minor intraday cooling dip is visible, the price trades strongly above expanding, bullishly stacked EMAs. Consider fresh entries at Rs 970–990, targeting Rs 1,080 and Rs 1,150. Maintain a strict Stop Loss at Rs 910."