Paras Defence shares zoomed 10% to hit upper circuit limit. Here's what triggered this move

Shares of Paras Defence and Space Technologies Ltd witnessed a sharp uptick in Tuesday's trade. The stock surged 10 per cent to touch its upper price band of Rs 1,066.50. Today's jump in the share price cam after the defence firm secured a license from the Centre to manufacture MK-46 and MK-48 Belt-fed light machine gun.

"With reference to the captioned subject matter, we are pleased to inform you that M/s. Paras Defence and Space Technologies Ltd (the Company) has been granted a License under the Arms Act, 1959. This license authorizes the Company to manufacture MK-46 and MK-48 Belt-fed Light Machine Gun (LMG) – Modernised Enhanced and Redefined LMG with a proposed annual capacity of 6,000 numbers each," it stated in a BSE filing.

Paras Defence's stock saw high trading volume of BSE today as around 23,000 shares changed hands at the time of writing this story. The figure was higher than the two-week average volume of 14,000 shares. Turnover on the counter came at Rs 2.39 crore, commanding a market capitalisation (m-cap) of Rs 4,186.51 crore.

On the technical play, the scrip traded higher than the 5-day, 10-day and 50-day simple moving averages (SMAs) but lower than the 20-day, 30-, 100-, 150-day and 200-day SMAs. The stock's 14-day relative strength index (RSI) came at 50.59. A level below 30 is defined as oversold while a value above 70 is considered overbought.

As per BSE, the company's stock has a price-to-equity (P/E) ratio of 81.78 against a price-to-book (P/B) value of 8.45. Earnings per share (EPS) stood at 12.66 with a return on equity of 10.34.

Paras Defence is primarily engaged in the designing, developing, manufacturing, and testing of various defence and space engineering products and solutions. It has five major product category offerings in defence and space optics, defence electronics, heavy engineering, electromagnetic pulse protection solutions and niche technologies. As of September 2024, promoters held a 58.94 per cent stake in the company.