10% Upper Circuit: Paras Defence Stock Jumps On Lifetime License To Manufacture Light Machine Guns

The shares of Paras Defence and Space Technologies Ltd surged 10% on Tuesday, January 7, after the company announced a milestone. Paras Defence informed the stock exchanges that it had been granted a lifetime license under the Arms Act, 1959, by the Department for Promotion of Industry & Internal Trade (DPIIT), Ministry of Commerce & Industry.

License Details & Impact

The license allows Paras Defence to manufacture advanced MK-46 and MK-48 Belt-fed Light Machine Guns (LMG), described as modernized, enhanced, and redefined models. The company has proposed an annual production capacity of 6,000 units for each type of LMG.

This approval is expected to boost Paras Defence's manufacturing capabilities and enhance its presence in the defence sector. The lifetime validity of the license provides long-term growth potential.

Stock Market Reaction

Following the announcement, Paras Defence shares hit a day's high of Rs 1,066.50, registering a sharp 10% increase in early trading. The stock had initially opened slightly lower at Rs 960.65 compared to the previous close of Rs 969.55.

By noon, the stock was seen trading at Rs 1,053.90 with a gain of nearly 9% on the National Stock Exchange (NSE).

Despite the day's rally, Paras Defence shares are still trading 49% below their 52-week high of Rs 1,592.75. However, the stock has rebounded strongly, climbing 75% from its 52-week low of Rs 608.75.

Over the past year, Paras Defence and Space Technologies has displayed mixed stock performance. While the stock has declined by 8% in the past month and 33% over the last six months, it has managed to achieve a notable 32% gain in the one-year period.

Business Updates

Paras Defence has been actively expanding its capabilities and securing significant contracts in the defence sector. In November, the company inaugurated a state-of-the-art optical systems testing facility in Navi Mumbai, Maharashtra.

ICRA upgraded its outlook on Paras Defence from "Negative" to "Stable" in November, reaffirming the ratings for the company's long-term and short-term facilities.

Paras Defence secured an order worth Rs 61.43 crore from the Ministry of Defence for upgrading Optronic Periscope Sight systems, including ESM Warners, for Indian Naval Submarine applications.