01 — At a Glance
Defence Made in Navi Mumbai (Seriously, They’re Shooting Orders)
- 52-Week High / Low₹972 / ₹401
- H1 FY26 Revenue₹199 Cr
- H1 FY26 PAT₹35.2 Cr
- H1 FY26 EPS₹3.45
- FY25 Full Year Revenue₹365 Cr
- Order Book₹930 Cr
- Book Value₹83.4
- Price to Book7.7x
- Debt to Equity0.08x
- Recent QIP (Oct 2024)₹135 Cr @ ₹1,045
Auditor’s Opening Note: Paras Defence returned ₹199 crore in H1 FY26 revenue, growing 24% YoY, with PAT up 21.1% YoY. More importantly: the order book sits at ₹930 crore (up from ₹630 cr in FY24), the company is almost debt-free, and in the last 18 months they won contracts worth ₹881 crore. The P/E of 70.3x makes Warren Buffett look aggressive. But the drone wars are heating up, DRDO is literally handing them money, and defence spending isn’t slowing down. The stock climbed 44% in 12 months. Question: is it priced for Ray guns yet?
02 — Introduction
Welcome to the Indian Defence Sector: Where Every Order Is a Lottery Ticket
Let’s introduce Paras Defence and Space Technologies — a company so niche that at dinner parties, explaining what they do takes longer than they take to manufacture a precision optical component. Founded in 1979 by Sharad Shah (now run by his son Munjal Shah), they operate out of Navi Mumbai and Ambernath making cameras that can see a mosquito from 10 km away, components that go inside rockets, and counter-drone systems that would make any border security official weep with joy.
Their claim to fame? They’re the sole Indian manufacturer of critical imaging components for space applications, including large-size optics and diffractive gratings. Translation: ISRO literally has no other option. Neither does DRDO. Neither does the Indian Navy. When HAL, Bharat Electronics, and Godrej need precision optical systems, Paras Defence is the guy their supply chain depends on. Not the guy they want to compete with. The guy they need.
The business has two legs. One: Defence Engineering (54% of H1 FY25 revenue) — electronics, heavy engineering, EMP-protected equipment. Two: Optics and Optronics (46% of revenue) — space cameras, submarine periscopes, thermal cameras for night vision. Both were in the ₹183 crore and ₹186 crore range in FY22, combined. By H1 FY26? They’re firing on all cylinders.
The stock has delivered 43.5% returns in 12 months, a 37.8% return over 3 years. Trading at 70x P/E. Yet somehow, the market cap is still only ₹5,164 crore — pocket change compared to Bharat Electronics (₹3.2 trillion) or HAL (₹2.6 trillion). The question isn’t “will Paras Defence win orders?” They’ve already won ₹930 crore worth. The question is: can they execute without stumbling?
Management Quote (Recent Concalls): “We anticipate 20%-30% revenue growth in FY25-FY26.” They’re projecting it. So far, they’re beating it. Q1 FY26 revenue was up 24% YoY, profit up 21.1% YoY, order book grows every month. This is not a promise to shareholders. This is a company running faster than its own forecast.
03 — Business Model: Making the Invisible War… Visible
They Sell What The Army & Scientists Need. The Army & Scientists Need A Lot.
Paras operates across four distinct tech verticals, each serving government and defence players exclusively (mostly). Let’s break it down before your eyes glaze over:
1) Defence & Space Optics (46% of H1 FY25 revenue): They manufacture optical mirrors, gratings, infrared lenses, diamond-turned precision components, hyperspectral cameras. The kind of stuff that goes inside satellite cameras, missile guidance systems, and naval periscopes. Demand drivers: Indian space program growth, modernisation of armed forces, submarine acquisition programs. Customer: ISRO, DRDO, Navy, HAL, Cochin Shipyard.
2) Defence Electronics & Automation (54% of H1 FY25 revenue): Rugged command-and-control consoles, electronic warfare systems, signal processing units, avionic suites. Recently expanded to drone detection and anti-drone systems through a subsidiary called Paras Anti-Drone Technologies. They build the stuff that makes fighter pilot heads spin and counter-terrorism teams sleep at night.
3) Heavy Engineering: Flow-formed rocket and missile motor tubes, electromechanical assemblies. Basically, they help build the hardware that goes boom. Customers: DRDO, missile manufacturers, defence contractors.
4) Electromagnetic Pulse (EMP) Protection Solutions: Equipment that survives nuclear radiation. Because apparently, someone at DRDO decided “what if our gear had to work even if someone detonated an atom bomb next door?” Paras said “sure, we can do that.” They can.
Domestic86%FY24 Revenue
Exports14%Israel, USA, Europe
Top 5 Clients54%Revenue Concentration
Patents3+EMP & Rugged Tech
Recent Product Licenses (Game Changers): In January 2025, Paras secured a license to manufacture MK-46 and MK-48 belt-fed light machine guns with 6,000 units annual capacity each. In October 2024, they got licensed to manufacture cannons for naval and air defence systems (100 units/year capacity). Translation: they’re not just making cameras anymore. They’re making the weapons systems that use the cameras.
💬 Here’s the real question: Is Paras Defence a precision optics company that stumbled into defence electronics, or a defence contractor that’s figuring out optics? The answer determines if this stock keeps flying.
04 — Financials Overview
H1 FY26: The Numbers That Made Your Broker Text You
Result type: Half-Yearly Results (H1 FY26) | H1 FY26 EPS: ₹3.45 | Annualised EPS (H1×2): ₹6.90 | FY25 Full Year EPS: ₹7.87
| Metric (₹ Cr) |
H1 FY26
Sep 2025 |
H1 FY25
Sep 2024 |
Q1 FY26
Jun 2025 |
YoY % |
QoQ % |
| Revenue | 199 | 160 | 93 | +24.4% | +114% |
| Operating Profit | 50 | 39 | 22 | +28.2% | +127% |
| OPM % | 25% | 24.4% | 23% | +60 bps | +200 bps |
| PAT | 35.2 | 29.1 | 16.6 | +21.1% | +112% |
| EPS (₹) | 3.45 | 2.85 | 1.64 | +21.1% | +110% |
P/E Reality Check: H1 FY26 EPS of ₹3.45 × 2 (annualised) = ₹6.90. CMP ₹641 ÷ ₹6.90 = P/E 92.9x. Screener shows 70.3x because it’s using FY25’s full-year EPS (₹9.11). The stock is not quite as expensive as it looks, but it’s also not cheap. The question is whether 20-30% revenue growth justifies 70x multiples in a country where equity multiples compress every time a politician sneezes. YoY profit growth of 21.1% is respectable. QoQ growth of 112% is a half-year comparison game. Don’t fall in love with Q2 being twice Q1 — that’s seasonal. The real test: can they grow both halves at 20%+ consistently?
05 — Valuation: Are We Paying For Dreams or Reality?
The Fair Value Gauntlet: Three Methods, One Brutal Truth
