🧠 At a Glance
Paras Defence is a niche defence-tech play with core capabilities in optics, anti-drone systems, and electromagnetic warfare. It’s the only Indian maker of large space optics, exports to France, and has a JV with Israel’s Heven Drones. But at 113x P/E and a 501-day cash conversion cycle, is this stock a tech marvel or just high-calibre hopium?
1. 🧨 Intro: Make in India, Valued in Mars?
Paras Defence is what happens when investors mix nationalism with stock market FOMO. Anti-drone tech? ✔️ Space optics? ✔️ DRDO orders? ✔️ Now add a P/E of 113, debtor days of 295, and a promoter selling 3% stake recently. 🫠
Great business model, but are we funding defence or defending a premium?
2. 🛰️ WTF Do They Even Do?
Paras Defence works in 4 defence-tech verticals:
- 🔭 Defence & Space Optics – large-size lenses, space mirrors, gratings. Basically Hubble but Desi.
- 📟 Defence Electronics – Radar interfaces, embedded electronics
- 🏗️ Heavy Engineering – For missile launchers, ship hulls etc.
- 💥 EMP Protection – Anti-electromagnetic warfare products
Recent focus? Drones, anti-drone tech (CHIMERA 200), and exports.
3. 💸 Financials – Profit, Margins, ROE, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹222 Cr | ₹254 Cr | ₹365 Cr |
| EBITDA | ₹58 Cr | ₹53 Cr | ₹97 Cr |
| PAT | ₹36 Cr | ₹30 Cr | ₹61 Cr |
| EBITDA Margin | 26% | 21% | 27% |
| ROCE | 13% | 10% | 15.4% |
| ROE | 11% | 8.3% | 11.3% |
- ✅ Sales CAGR (5Y): 20%
- ✅ PAT CAGR (3Y): 31%
- ✅ OPM back to 27% in FY25
- ❌ Still subscale — ₹365 Cr sales vs ₹6,900 Cr market cap 😶
4. 📊 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹861 |
| EPS (FY25) | ₹7.87 |
| P/E | 113x 😱 |
| Book Value | ₹79.4 |
| P/B | 10.8x 🤯 |
| MCap | ₹6,939 Cr |
| EV/EBITDA | ~70x |
EduFV Estimate:
At 35–40x sustainable earnings (generous for defence), fair value = ₹275–₹315
Conclusion? You’re not just buying a stock. You’re sponsoring DRDO’s Instagram account.
5. 🍛 What’s Cooking – News, Triggers, Drama
🛰️ Exports to France (CERBAIR): ₹22 Cr anti-drone order → first global defence breakthrough
🛩️ JV with Israel’s Heven Drones: For hydrogen-powered logistics drones
🔋 Divestments: Clean-up mode – exited two UAV subsidiaries recently
🏭 ₹12,000 Cr Optics Park MoU: Massive capex ambition, but still under planning
📡 DRDO Order: ₹142 Cr laser system awarded
So yeah — action-packed, but also investor-expectation-packed.
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Net Worth | ₹640 Cr |
| Debt | ₹24 Cr |
| Reserves | ₹600 Cr |
| Fixed Assets | ₹193 Cr |
| CWIP | ₹8 Cr |
| Investments | ₹28 Cr |
| Total Assets | ₹852 Cr |
✅ Almost debt-free
✅ Asset-light for a defence company
⚠️ Most assets are current — which means WC tied up
7. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY23 | ₹46 Cr | ₹10 Cr | -₹41 Cr | ₹15 Cr |
| FY24 | -₹46 Cr | -₹2 Cr | ₹33 Cr | -₹14 Cr |
| FY25 | ₹45 Cr | -₹87 Cr | ₹74 Cr | ₹31 Cr |
🟠 FCF volatile
🔴 FY24 operating cash negative despite profit
🟢 FY25 bounce-back thanks to ₹74 Cr from financing
Still not consistent enough for a ₹7,000 Cr company.
8. 📉 Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROCE | 15.4% |
| ROE | 11.3% |
| D/E | 0.04x |
| Debtor Days | 295 😵💫 |
| Inventory Days | 323 😬 |
| Payables Days | 117 |
| CCC | 501 Days 🚨 |
That’s 1.5 years to convert a sale to cash. This isn’t defence… this is a government grant scheme.
9. 💰 P&L Breakdown – Show Me the Money
- FY25 Revenue: ₹365 Cr
- EBITDA: ₹97 Cr
- PAT: ₹61 Cr
- EPS: ₹7.87
A clean, 27% margin business… but growth is slow and customer is mostly Indian Government (read: slow-paying).
10. 🧩 Peer Comparison – Who Else in the Game?
| Company | ROCE | OPM | P/E | MCap |
|---|---|---|---|---|
| Paras Defence | 15.4% | 27% | 113x | ₹6,939 Cr |
| Data Patterns | 21.6% | 38% | 75x | ₹16,737 Cr |
| Zen Tech | 36.7% | 38% | 63x | ₹17,639 Cr |
| HAL | 33.8% | 31% | 40x | ₹3.34 L Cr |
👉 Paras has decent margins but lowest scale and highest valuation.
11. 📦 Misc – Shareholding, Promoters, FII Movement
| Category | May ’25 |
|---|---|
| Promoter | 53.74% |
| FII | 7.28% |
| DII | 2.16% |
| Public | 36.82% |
⚠️ Promoter stake fell 3.31% recently
✅ FII stake rising steadily
👀 Over 3.2 lakh shareholders now. Crowd alert.
12. 🧑⚖️ EduInvesting Verdict™
Paras Defence is a mini-multicap rocket ship with some real tech, real products, and real traction. But also:
- Unreal expectations
- Unreal valuation
- Real debtor risk
- And a very real P/E of 113
This is a textbook “Buy the India Defence Story” stock… but at this price, you’re buying the poster, not the actual factory.
🧮 EduFair Value Range: ₹275 – ₹315
“The product is defence, but the stock price needs demilitarisation.”
✍️ Written by Prashant | 📅 9 July 2025
Tags: Paras Defence, anti-drone stocks, defence manufacturing, make in India, optics park, CHIMERA system, overpriced defence stocks, EduInvesting
