Shares of Paras Defence and Space Technologies Ltd. remained muted with a marginal loss of around 0.9% in the intraday session despite the company reporting a strong year-on-year performance in the first quarter.
Speaking to NDTV Profit, Amit Mahajan, Director, Paras Defence and Space Technologies, said the June quarter performance provides a strong foundation for the rest of the fiscal year, while cautioning against comparing defence companies on a quarter-to-quarter basis.
Investors are watching how Paras Defence and Space Technologies navigate execution, margins and its expansion into semiconductors.
Q1 Performance And FY27 Outlook
Mahajan said the company delivered a “very, very good quarter”, citing the improvement in revenue and the ability to maintain EBITDA and PAT levels. He said the first quarter should be viewed as a positive starting point rather than as a sequential comparison.
On the business mix, Mahajan expects the optics and optronic systems segment to see a slight increase during the year, while defence engineering is expected to remain strong as more programmes are announced.
He expects the overall mix to remain broadly similar to last year, with optics and optronic systems contributing around 45-50%, while the remainder comes from defence engineering.
Also Read | Paras Defence Q1 Result: Net Profit Jumps 40%, Revenue Up 38% — Check Details
Export Growth To Offset Import Costs
Addressing concerns around higher raw material costs and rupee depreciation, Mahajan said the impact on profitability remains limited because the value addition in Paras Defence's products is significantly higher than the cost of the imported raw materials.
The company is also looking to increase exports, which Mahajan described as a “natural hedge” against foreign exchange movements. At the same time, the proportion of imported raw materials is gradually shrinking.
Semiconductor Venture To Be Phased
On Paras Defence's proposed Rs 6,200 crore semiconductor venture, Mahajan said the company's primary objective is to strengthen indigenous capabilities for defence and space applications, particularly detectors and sensors.
He said government support at both the central and state levels would help make the investment more manageable. Rather than immediately committing to large-scale manufacturing, Paras Defence plans to initially focus on advanced packaging, including 2.5D and 3D technologies, targeting high-value, low-volume chips.
The company already has a US partner and is exploring additional partnerships with Western companies. Mahajan said semiconductor revenues are unlikely to begin this year or next year.
For FY27, he maintained that a 30-35-40% growth trajectory remains a reasonable expectation, with the semiconductor initiative expected to add value only over the longer term.
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