1. At a Glance
Paras Defence is the startup version of HAL—ambitious, high-tech, and a little allergic to profits. Q1 FY26 revenue is flying, but profits are on cruise control.
- Revenue: ₹93 Cr
- Net Profit: ₹14 Cr
- OPM: 23%
- P/E: 102x (yes, three digits)
- ROE: 11.3% (you’d expect more for a “missile” company)
2. Introduction with Hook
Imagine Elon Musk started a defence company in India, but with more PowerPoint decks and less launch success. That’s Paras Defence. A cocktail of space optics, drones, and defense lasers—served with a side of sky-high valuation and molasses-speed execution.
- TTM Sales: ₹374 Cr
- TTM Net Profit: ₹62 Cr
- Debt-free, but not stress-free
- Stock trading at 9.89x book value (that’s not a typo)
3. Business Model (WTF Do They Even Do?)
Paras doesn’t just make products—they make defense gear that sounds like a Marvel villain’s arsenal:
- Defense & Space Optics: India’s only maker of diffractive gratings = basically space glasses
- Electromagnetic Pulse Protection: EMP bunkers in case you upset Elon
- Defense Electronics: Anti-drone jammers, sensors, and tech with names like CHIMERA 200
- Heavy Engineering: Think DRDO laser mounts, not gym machines
Oh, and now they’re into hydrogen-powered drones via Israeli JV. Because… why not?
4. Financials Overview
Here’s the defense-grade data:
| Metric | FY25 | FY24 | YoY |
|---|---|---|---|
| Revenue | ₹365 Cr | ₹254 Cr | +43.7% |
| EBITDA | ₹97 Cr | ₹53 Cr | +83% |
| PAT | ₹61 Cr | ₹30 Cr | +103% |
| OPM | 27% | 21% | Glorious |
Commentary:
Margins are looking like they’re wearing a bulletproof vest. PAT doubling is great, but let’s not forget—it started low. Still not HAL-level dominance.
5. Valuation
Let’s defuse the hype bomb:
- EPS TTM = ₹7.94
- P/E Range:
- 60x = ₹476
- 80x = ₹635
- 100x = ₹794
- Fair Value Range: ₹630–₹790
- EV/EBITDA:
- EV ~ ₹6,300 Cr
- EBITDA FY25: ₹97 Cr
- EV/EBITDA: 64.9x — feels like paying luxury tax on a MIG-21
If you’re buying at 102x earnings, you better believe they’re building Iron Man suits.
6. What’s Cooking – News, Triggers, Drama
- CHIMERA 200: ₹22 Cr export order to France
- JV with Heven Drones (Israel): For hydrogen-powered cargo drones
- DRDO Order: ₹142 Cr laser system
- Optics Park in Navi Mumbai: ₹12,000 Cr MoU — that’s “Startup India” on steroids
- Divested 100% in Paras Green UAV Pvt Ltd (good riddance?)
More plot twists than a Christopher Nolan script. Drones, lasers, bunkers, exports—it’s all there.
7. Balance Sheet
Laser-focused or scatterbrained?
| Metric | FY25 | FY24 |
|---|---|---|
| Equity | ₹640 Cr | ₹520 Cr |
| Debt | ₹24 Cr | ₹66 Cr |
| Net Worth | ₹600 Cr | ₹406 Cr |
| Fixed Assets | ₹193 Cr | ₹186 Cr |
Takeaways:
- Nearly debt-free (a rare defense company trait)
- Cash flow improving
- Asset-light? Sort of. Unless you count those drone warehouses.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net CF |
|---|---|---|---|---|
| FY25 | ₹45 Cr | ₹-87 Cr | ₹74 Cr | ₹31 Cr |
| FY24 | ₹-46 Cr | ₹-2 Cr | ₹33 Cr | ₹-14 Cr |
Observations:
- Operating cash finally behaving
- Investing cash is gone—probably spent on more drone toys
- Financing cash coming from equity, not loans
Basically: cash flow’s not limping, but it’s got a sprain.
9. Ratios – Sexy or Stressy?
| Metric | FY25 | FY24 |
|---|---|---|
| ROE | 11.3% | 7.8% |
| ROCE | 15.4% | 10% |
| Debtor Days | 295 | 285 |
| Inventory Days | 323 | 455 |
| D/E | 0.04 | 0.13 |
Verdict:
- Debtor days longer than a government tender process
- ROCE improved, finally
- Still waiting for a CFO who’s allergic to receivables
10. P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT |
|---|---|---|---|
| FY23 | ₹254 Cr | ₹53 Cr | ₹30 Cr |
| FY24 | ₹365 Cr | ₹97 Cr | ₹61 Cr |
| FY25 | ₹374 Cr (TTM) | ₹95 Cr | ₹62 Cr |
Comment:
Steady growth. But profit growth is being chased by receivables like a snail chasing a cheetah.
11. Peer Comparison
| Company | Revenue | PAT | P/E | ROE |
|---|---|---|---|---|
| HAL | ₹30,981 Cr | ₹8,360 Cr | 36x | 26.1% |
| BEL | ₹23,769 Cr | ₹5,321 Cr | 54x | 29.3% |
| Data Patterns | ₹708 Cr | ₹215 Cr | 70x | 15.1% |
| Zen Tech | ₹974 Cr | ₹280 Cr | 57x | 26.0% |
| Paras Defence | ₹374 Cr | ₹62 Cr | 102x | 11.3% |
Takeaway:
Paras is playing in the same stadium, but it’s still doing warmups while HAL is scoring hat-tricks.
12. Miscellaneous – Shareholding, Promoters
| Category | Mar ’25 | Jun ’25 |
|---|---|---|
| Promoters | 57.05% | 53.74% |
| FIIs | 5.24% | 6.85% |
| DIIs | 1.54% | 1.94% |
| Public | 36.16% | 37.46% |
- Promoter holding is falling—that’s a red flag in camouflage
- FII interest rising (maybe they believe in the drone story?)
- Public is still buying at ₹750+—optimism is the true defense strategy
13. EduInvesting Verdict™
Paras Defence is the classic “tech-sounding defense bet” that looks amazing on PPTs and sounds cool in earnings calls. But it’s still too early in its growth curve and too late on valuations.
Cool drones? Check. Exports to France? Check.
Real cash flows and sustainable RoE? Still downloading…
A flashy runway, but we’re still waiting for the jet to take off.
Metadata:
Written by EduInvesting Team | 25 July 2025
Tags: Paras Defence, Q1 FY26, Defence Stocks, EduInvesting Premium
