Paras Defence Q4 Results Review: Nirmal Bang Maintains 'Hold', Hikes Target Price

Paras Defence achieved a revenue of Rs 1,082 million, up 35.8% YoY, driven by higher execution in the quarter. The Optics and Optronic Systems segment contributed 51%, while the Defence Engineering segment contributed to 49% of the revenue. The revenue from Optics segment grew by 374% YoY while the Defence Engineering revenue declined by 22%. Absolute Ebitda grew by 131% YoY driven by lower input costs. Ebitda margin stood at 26% which is 1077 bps higher than in Q4 FY24. Adjusted profit after tax increased by 98% YoY, supported by higher other income and lower than usual tax.

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Nirmal Bang Report

Paras Defence and Space Technologies Ltd.'s revenue, Ebitda, and PAT Growth CAGR during FY25-FY27E stand at 26%, 26%, and 25%, respectively. The stocks has rallied by 40% since our preview result, issued on April 13. We reduced the multiple from 72x to 62x to reflect its three-year average.

The stock is trading at a 1-year forward P/E of 55.6x, below the three-year average P/E of 62x. We revise the stock to Hold and value Paras Defence at 62 times Mar’27E EPS (in line with the 3-year average P/E) to arrive at a target price of Rs 1,517, implying an upside of 11.6%.

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