Shares of Paras Defence and Space Technologies hit a fresh 52-week high of ₹848 apiece in Friday's trading session, continuing their bull run for the second consecutive trading session. In CY23 so far, the shares have delivered a stellar return of 35%, and for the early investors, the shares produced even bigger returns.
The shares, which hit stock exchanges on October 01, 2021, have gained 367% to trade at the current price of ₹816.30 apiece from their issue price of ₹175 apiece. The company's IPO received a tremendous response from investors, as it was subscribed to nearly 304 times, resulting in a strong debut for the stock at ₹475 apiece, a premium of 185% over the issue price.
Paras Defence and Space Technologies is primarily engaged in the designing, developing, manufacturing, and testing of a variety of defence and space engineering products and solutions.
The company's business is spread across five verticals, including defence and space optics, defence electronics, heavy engineering, electromagnetic pulse protection solutions, and niche technologies. For the Chandrayaan-3 project, the company supplied the navigation systems.
Defence and space optics stands at the forefront of the company business, involved in producing ultra-high precision optics tailored for cutting-edge defence and space applications such as thermal imaging and space imaging systems.
In June, the company won the contract for the realisation of optical periscopes for ICS from the Instrument Research and Development Establishment (IRDE), Govt. of India, Ministry of Defence, DRDO. The total value of this contract was Rs. 53 crore.
Going forward, the company stands to benefit from the Indian government's increased budget allocation to the space sector. In the recent Union Budget for 2023–24, the government allocated ₹12,544 crore to the Department of Space, marking a substantial 19% increase from the previous year.
This budget allocation has been done for the Department of Space and other organisations under it, like the Indian Space Research Organisation (ISRO) and its centres, Indian National Space Promotion and Authorisation Centre, the regulator for the private sector space players, and others.
This boost in funding demonstrates the government's commitment to advancing India's capabilities in space technology and exploration. The increased budget allocation presents a significant opportunity for companies like Paras Defence and Space Technologies to expand their presence and contribute to the nation's space initiatives.
FY 2022–23 was a remarkable year for the company, as it plunged deeper into futuristic technologies and expanded footprint across critical sectors.
In its FY23 annual report, the company said it has successfully established itself as an exclusive Indian entity with competencies in the domains of submarine optical periscopes, remotely controlled border defence systems, hyperspectral imaging systems, and electromagnetic pulse (EMP) protection solutions.
Parallelly, it diversified to capture emerging opportunities in the rapidly growing drone and anti-drone markets. The company also said, it entered several new collaborations to target newer opportunities.
Regarding financials, the company clocked a consolidated net profit of ₹30 crore in Q1FY24, a significant turnaround from a net loss of ₹9 crore in the same period of last year. The revenue from operations during the same quarter came in at ₹263 crore, a surge of nearly 16% YoY.
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