Premier Explosives Ltd. has entered into a memorandum of understanding with Global Munition Ltd. to set up a joint venture to manufacture defence and aerospace products, according to exchange filings on Friday.
Global Munition's parent NIBE Ordnance and Maritime Ltd. stated in a BSE filing that the scope of the agreement involves the companies jointly developing, manufacturing and supplying "ammunition, explosive, aerospace and other defence products".
In the proposed venture, Premier Explosives will hold a 49% stake while Global Munition will hold the balance 51% equity.
Notably, NIBE Ordnance and Maritime is a part of NIBE Group, a Swedish company that manufactures energy-efficient indoor heating, cooling, and ventilation products.
In the quarter ended September, Premier Explosive had reported a 21% year-on-year rise in its revenue from operations to Rs 94.6 crore. In the year-ago period, it had earned Rs 78.4 crore as revenue. However, the company's net profit for the second quarter had declined 27% to Rs 8.39 crore, compared to Rs 11.6 crore in the year-ago period.
The company's earnings before interest, taxes, depreciation and amortisation had slipped sharply by 24% year-on-year to Rs 16.6 crore in the July-September period. Explaining the reason for this drop, Premier Explosives' Managing Director TV Chowdary had said, “Ebitda to some extent has gone down on account of delays in deliveries.”
Chowdary, however, has forecast that the company will achieve a turnover of Rs 5,500 crore by 2025 and ramp it up further to Rs 10,000 crore by 2030.
Shares of Premier Explosives on Friday closed 9.9% higher at Rs 516.55 apiece on the BSE, compared to a 1.04% advance in the benchmark Sensex.
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