Paras Defence Shares Gets Nirmal Bang's 'Buy' Upgrade, Hikes Target Price — Here's Why

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Nirmal Bang Report

Paras Defence and Space Technologies Ltd.'s revenue, Ebitda, and PAT growth CAGRs for FY25- FY27E are 37%, 38%, and 39%, respectively. Paras Defence is moving from a component supplier to a value-added systems maker by boosting in-house production to maintain higher profits.

The company's revenue mix has evolved from 90:10 (Component: System) to 60:40, with a long-term objective of 40:60. Paras Defence expects the orderbook to reach Rs 10 billion in FY26 and then Rs 15 billion in the near future.

The company has been delivering one periscope per quarter with secured orders, ensuring strong revenue visibility over the next two-three years.

The company is presently selling at a P/E of 54x for FY27E, which is lower than its three-year average of 60x.

We upgrade the company to "Buy" and value it at 62x FY27E EPS, resulting in a target price of Rs 1,877, representing a 15.5% upside.

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