Technical Trade Call: Aerospace & Defense Stock Pick For Next Week By Sumeet Bagadia

As of Friday's closing session, the market capitalization of Paras Defence and Space Technologies Ltd, a small-cap company in the Aerospace & Defence sector, was Rs 3,037.71 Cr. With five business verticals-Defense & Space Optics, Defence Electronics, Heavy Engineering, Electromagnetic Pulse Protection Solutions, and Niche Technologies-Paras provides a broad variety of Products & Solutions for Defence & Space Applications.

It is involved in technologies for rockets and missiles, space and space research, naval systems, land and armoured vehicles, electronic warfare and surveillance, and electromagnetic shielding. It has over 40 years of continuous business development in the field of defense and space engineering. The stock climbed 7.11% YTD in the first week of 2024 from January 1 to January 5. Nevertheless, Sumeet Bagadia, executive director of Choice Broking, recommended purchasing the stock at a target price of Rs 900, indicating a possible gain of 15.81% from the current market price of Rs 777.10.

Paras Defence and Space Technologies Share Price Target

From Sumeet Bagadia's Desk: Buy PARAS @ Rs 774 and add upto Rs 750, with a target of Rs 900 and a stop loss at Rs 715, duration: 1 to 3 months.

The stock has recently experienced a breakout of an Inverted Head & Shoulders pattern, accompanied by significant trading volume. Market expectations are leaning towards further upward movement, with a potential target of Rs 900. On the downside, notable support is observed in the vicinity of Rs 715.

Moreover, PARAS is trading above key Exponential Moving Averages (EMAs), including the 20-day, 50- day, 100-day, and 200-day EMAs, indicating robust bullish momentum and suggesting potential for further upward price movement. The Relative Strength Index (RSI) is presently at 62, showing an upward trajectory and indicating increasing buying momentum.

Additionally, the Stochastic Relative Strength Index (Stoch RSI) exhibits a positive crossover. These technical indicators collectively suggest that PARAS may have the potential to reach a target price of Rs 900 in the near term.
To manage risk effectively, it is advisable to set a stop-loss (SL) at Rs 715 to safeguard the investment in the event of an unexpected market turn. A prudent strategy would be to consider buying on dips at levels of Rs 750.

Overall, considering the technical analysis and current market conditions, PARAS presents a promising buying opportunity for those aiming for a Rs 900 price target, provided that prudent risk management measures are in place, said Sumeet Bagadia, executive director of Choice Broking.

Paras Defence and Space Technologies Financials

On a standalone basis, the company reported revenue from operations of Rs 59.80 crore in the September 2023 quarter up 9.46% from Rs. 54.63 crore in the September 2022 quarter. While EBITDA totals Rs. 17.38 crore, up 10.49% from Rs. 15.73 crore in the same quarter of FY23, net profit was at Rs. 10.10 crore in Q2FY24, up 11.85% from Rs. 9.03 crore in Q2FY23. From Rs. 2.32 in Q2FY23 to Rs. 2.59 in Q2FY24, Paras Defence EPS rose.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.