Despite a strong quarterly performance, Paras Defence’s shares remain subdued as investors await the real impact of its strategic push into semiconductor manufacturing and long-term growth prospects.
Paras Defence and Space Technologies shares were little changed in intraday trade even after the company posted a stronger first quarter, as investors continued to weigh execution, margins and its push into semiconductors. NDTV Profit reported that the stock slipped about 0.9% despite the earnings beat, underscoring how closely the market is watching whether the defence equipment maker can turn growth into sustained operating strength.
Amit Mahajan, director at Paras Defence, told NDTV Profit that the June quarter was a “very, very good quarter” and should be viewed as a solid base for the rest of the year rather than judged against the previous quarter. The company’s results support that reading: Business Standard reported that consolidated net profit rose 1.1% year on year to ₹14.27 crore in the quarter, while net sales increased 11.5% to ₹93.19 crore. Kotak Neo’s results summary said revenue rose 12.2% sequentially and 13.6% year on year, with earnings also improving.
Mahajan said the business mix should remain broadly similar to last year, with optics and optronic systems contributing about 45% to 50% of sales and defence engineering making up most of the rest. Business Standard said revenue from optics and optronic systems reached ₹42.5 crore in the quarter, while defence engineering revenue was ₹50.69 crore. The company’s operating costs also rose, with Business Standard reporting total expenditure of ₹71.31 crore, up 19.9% from a year earlier.
On costs, Mahajan said imported inputs and a weaker rupee have not significantly hurt profitability because Paras Defence adds much more value than the cost of the raw materials it buys from abroad. He said the company is also looking to expand exports as a natural hedge against foreign exchange swings and is steadily reducing its dependence on imported materials. That fits with the company’s broader strategy: Business Standard reported in March that Paras Defence set up Paras Semiconductors, a majority-owned unit focused on advanced heterogeneous packaging and 3D packaging for chips used in artificial intelligence, high-performance computing, networking and data centres.
Mahajan said the semiconductor plan is aimed first at building domestic capability for defence and space uses, especially detectors and sensors, and that the company will initially focus on advanced packaging rather than large-scale chip manufacturing. He said support from both central and state governments would make the project easier to fund and that revenues from semiconductors are unlikely to arrive this year or next. For FY27, he reiterated a 30%-35%-40% growth path, while saying the new business would add value only over the longer term.
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