Paras Defence and Space Technologies Ltd is back in the spotlight, and for good reason. On January 7, the company announced a game-changing development: it has secured a license under the Arms Act, 1959 to manufacture advanced light machine guns (LMGs). Following the announcement, its shares soared by over 7 percent to ₹1,040.35 apiece, with an intraday high of 10 percent.
This surge in stock price has reinvigorated investor interest, although the stock remains 40 percent below its all-time high of ₹1,592.7. Here’s why this milestone is significant for Paras Defence and its investors.
A Landmark Achievement: Machine Gun Manufacturing License
The license, granted by the Department for Promotion of Industry and Internal Trade (DPIIT), allows Paras Defence to manufacture MK-46 and MK-48 Belt-fed Light Machine Guns (LMGs). These modernized LMGs are designed for enhanced performance, offering advanced features suitable for modern defense operations.
With a proposed annual production capacity of 6,000 units for each model, this license is a strategic win for the company, enabling it to tap into India’s growing defense manufacturing sector. Notably, the license comes with lifetime validity, providing Paras Defence with long-term opportunities in this niche but critical market.
Strong Financial Backing
This milestone follows Paras Defence’s impressive financial performance in the second quarter of FY2025, where the company reported:
- Net Profit Growth: A 45% year-on-year increase, reaching ₹12.70 crore compared to ₹8.76 crore in the same period last year.
- EBITDA Margin Expansion: Margins rose to 26.1% from 25.3%, reflecting efficient operations and cost management.
Such strong financials underscore the company’s ability to leverage new opportunities effectively.
A History of Excellence
Paras Defence has consistently proven its capabilities in defense and space technologies. It was one of India’s most sought-after IPOs, receiving bids worth over ₹38,000 crore, making it one of the highest-subscribed IPOs in the country’s history.
The company has also secured prestigious projects, such as the ₹61.43 crore order from the Instruments Research and Development Establishment (IRDE), Ministry of Defence, for upgrading Optronic Periscope Sights for Indian Naval submarines.
Why This Matters for Investors
India’s defense manufacturing sector is undergoing a transformation, fueled by government initiatives such as Atmanirbhar Bharat and increased defense budgets. Paras Defence’s entry into machine gun manufacturing positions it at the forefront of this evolution.
Investors looking to capitalize on India’s defense boom should keep a close eye on Paras Defence. With its new license and robust financials, the company is poised for significant growth.
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Looking Ahead
With its newly acquired manufacturing license, Paras Defence has the potential to redefine its position in India’s defense ecosystem. Its focus on cutting-edge technology and consistent financial growth makes it a strong contender for long-term success.
As the defense sector continues to expand, Paras Defence’s ability to innovate and execute could turn this development into a game-changing opportunity for both the company and its investors. Now is the time to watch this stock closely.
Paras Defence share Price
