Paras Defence’s current order book stands at Rs 10 billion, with optics contributing over 60% (Rs 5.5–6 billion) and defence engineering accounting for Rs 4 billion. The optics segment, which includes periscopes and space optics programs, is expected to drive long-term growth, while engineering orders offer faster execution cycles.
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Nirmal Bang Report
Nirmal Bang has reiterated its Buy rating on Paras Defence and Space Technologies Ltd. with a target price of Rs 977, implying an upside of 47% from the current market price of Rs 663.
The brokerage cites robust multi-year revenue visibility, margin improvement, and attractive valuations post a recent correction as key drivers for its positive stance.
View and valuation:
Revenue, Ebitda, and PAT CAGR for FY25–FY27E stands at 33%, 35%, and 37%, respectively. Paras Defence enjoys near-zero competition in key defence niches, while the defence engineering segment— despite lower margins—offers strong scalability.
Paras’s move to Tier-1 supplier status is improving working capital cycles through higher customer advances.
The stock trades at 44x FY27E earnings per share, below its three-year average of 56x.
Nirmal Bang maintain Buy with a valuation of 57x Sep-27E EPS and a target price of Rs 977. The recent 13% correction offers 47% upside.
Upside drivers include strong multi-year revenue visibility, margin expansion from higher-value products, improving working capital, and attractive valuations post-correction.
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