Paras Defence shares rally 10% ahead of Q4, stock split; up 40% in 3 days

Shares of Paras Defence and Space Technologies surged nearly 10% on Wednesday, continuing rally for the third straight session, as investors rushed to buy stock ahead of its March quarter earnings report. The smallcap defence stock has risen over 40% in three days despite volatility in the broader market.

Early today, Paras Defence shares opened 3.5% higher at ₹1,384 after ending 17% in the previous sessions. Extending opening gains, the counter gained as much as 9.9% to ₹1,469, inching close to its 52-week high of ₹1,592.75 touched on July 5, 2024. The defence share has rebounded 115% from its 52-week low of ₹681.95 hit on May 10, 2024.

At the time of reporting, shares of Paras Defence were trading 4.9% higher at ₹1,402.55, with a market capitalisation of ₹5,651, paring half of early gains. Meanwhile, the equity benchmarks BSE Sensex and NSE Nifty were trading flat with marginal gains.

This week, defence stocks have witnessed a broad-based rally, with Data Patterns (India), Garden Reach Shipbuilders & Engineers, Mazagon Dock Shipbuilders, and Hindustan Aeronautics rising up to 32%  amid heightened India-Pakistan border tensions, following the Pahalgam terror attack on April 22. The sentiment was further boosted after India signed a deal with France early this week to buy 26 Rafale fighter aircraft worth ₹63,000 crore billion to enhance Indian Navy's capabilities.

Paras Defence shares gained momentum today as the homegrown defence engineering company is set to release its fourth quarter earnings report later today. The board of the company is also scheduled to consider and approve the sub-division of existing equity shares. The stock split will help make shares more affordable and accessible to retail investors, while it will also boost liquidity, increase trading volume, and enhance the company's market profile. Currently, public shareholders own 42.95% stake in the company, while remaining 57.05% shares are held by promoters.

The board will also consider dividend payment for the financial year ended March 31, 2025. Notably, Paras Defence has not paid any dividend to its shareholders in the last 5 years.

Last week, Paras Defence announced that it will manufacture critical magnets for India’s first indigenous Magnetic Resonance Imaging (MRI) machine as part of a consortium spearheaded by the Society for Applied Microwave Electronics Engineering and Research (SAMEER), an autonomous R&D institution under Ministry of Electronics and Information Technology (MEITY). It will be responsible for developing and manufacturing the high-performance magnets that form the core of MRI machines, which is expected to stimulate growth in India’s medical devices industry and ease heavy reliance on imports.

For the third quarter ended December 31, 2024, Paras Defence reported a consolidated net profit of ₹15.04 crore, up 125.82% from ₹6.66 crore posted in Q3 FY24. Revenue from operations rose 33.63% to ₹85.77 crore in Q3 FY25 as compared to ₹64.18 crore in the corresponding quarter last year.

Established in 1979 by Sharad Shah, Paras offers high precision products and turnkey solutions to the defense and space sector, operating in three main verticals – defence and space optics, defence electronics and heavy engineering.

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