Paras Defence Shares Surge 10%: Stock Split, Earnings Growth, and Defence Push Fuel Rally
Paras Defence and Space Technologies Ltd witnessed a strong rally of nearly 10% in its stock price on July 4, 2025, making it one of the top gainers on the Indian stock exchanges. The surge was driven by a combination of bullish investor sentiment following a recent stock split, robust quarterly earnings, and a favorable macroeconomic environment fueled by the Indian government’s continued push toward domestic defence procurement.
Key Drivers Behind the Rally
1. Stock Split Becomes Effective
Paras Defence shares traded ex-split on July 4, 2025, following the company’s 1:2 stock split announcement, wherein each equity share with a face value of ₹10 was divided into two shares of ₹5 each.
The split, aimed at enhancing liquidity and improving retail participation, resulted in increased buying interest across retail and institutional investors. Post-split, the stock adjusted from around ₹1,850 to ₹925 levels, drawing fresh attention from market participants looking to enter at more affordable prices.
2. Strong Q4FY25 Earnings Performance
The company reported a stellar financial performance in Q4 of FY25:
- Net profit rose 97% year-on-year to ₹19.7 crore
- Revenue grew by 36% to ₹108.2 crore
- EBITDA margin improved significantly from 15.6% to 26.2%
These figures suggest strong operational efficiency, a growing order book, and margin expansion led by high-value indigenous projects.
3. Favourable Policy Environment: DAC Approval Boost
The Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh, recently approved ₹1.05 lakh crore worth of indigenous defence procurement. The approvals include electronic warfare systems, missile defence infrastructure, and recovery vehicles — all of which align with Paras Defence’s core competencies in defence electronics and integration.
This announcement sent a wave of optimism across the defence sector, with stocks like Paras Defence, BEML, and Bharat Dynamics Ltd posting sharp gains.
Market Response and Technical Indicators
- BSE/NSE Price Movement: Paras Defence stock gained close to 10% intraday, settling around ₹930 per share.
- Trading Volume: The stock witnessed unusually high volume, nearly 2.5x its 30-day average.
- Technical Indicators: The RSI remains in a neutral zone (around 58–60), suggesting there may still be room for upside. Moving averages and MACD are flashing moderate bullish signals.
Broader Sectoral Context
India’s defence sector has been gaining significant traction in 2025 due to:
- The government’s Make in India for Defence initiative
- Rising defence exports and private sector involvement
- Increased capital allocation for defence in Union Budget FY25-26
- Strategic collaborations with global technology firms
Paras Defence is well-positioned to benefit from this environment, given its niche capabilities in optoelectronics, drones, space optics, and defence-grade manufacturing.
Analyst Commentary
Market analysts are largely optimistic about Paras Defence’s medium to long-term prospects. However, concerns around valuation persist:
- The stock is currently trading at a TTM P/E of over 100, which is considered expensive by traditional metrics.
- Analysts recommend accumulating on dips and watching for sustained order flow, especially from strategic sectors like aerospace and space-tech.
Investment Outlook
Pros:
- Strong government order pipeline
- Expanding profit margins
- Increased retail participation due to lower face value
- Leadership in defence and space technology components
Risks:
Volatility due to policy changes or geopolitical events
High valuation multiples
Execution risk in large-scale defence contracts
