THIS Defence Stock Rallies 14% to Hit 52-Week High, Surges 56% in Five Sessions: Do You Own It?

Mumbai, June 5, 2025 — In a remarkable show of investor enthusiasm, shares of Paras Defence and Space Technologies Ltd. soared by over 14% in intraday trade on Wednesday, marking a new 52-week high on the NSE and BSE. The stock has now jumped an eye-popping 56% in just five trading sessions, reinforcing its stature as one of the most sought-after defence sector counters in recent times.

A Stellar Run for Paras Defence

At around 11:45 AM, Paras Defence stock was trading at ₹1,190, up 14.2% from the previous close of ₹1,042. It touched an intraday high of ₹1,214, surpassing its earlier 52-week peak of ₹1,095. This upward trajectory comes on the back of increasing defence orders, a robust Q4 earnings performance, and optimism surrounding India's growing indigenous defence manufacturing capabilities.

Since May 30, the stock has risen from ₹760 to ₹1,190 — a surge of nearly ₹430 per share or 56%, as investor sentiment continues to favour domestic defence players amid rising geopolitical tensions and the government’s Atmanirbhar Bharat push.

What’s Fueling the Rally?

1. Strong Order Pipeline

Paras Defence recently disclosed a robust order inflow from both domestic and international clients. Its core offerings in electro-optics, defence electronics, and space optics have found growing demand amid rising defence budgets globally.

2. Favorable Government Policies

The Indian government’s Defence Acquisition Procedure (DAP) and increased allocation towards indigenous procurement have directly benefited companies like Paras Defence. The Defence Ministry’s aim to reduce imports and push domestic R&D has created a favourable ecosystem for defence startups and midcaps.

3. Q4FY25 Earnings Beat

In its Q4 results, Paras Defence reported a consolidated net profit jump of 42% YoY and revenue growth of 34%. The operating margin also improved, reflecting strong cost control and efficient execution of high-margin projects.

4. Strategic Collaborations

The company’s recent strategic collaboration with DRDO and private aerospace manufacturers has created an optimistic outlook for future contract wins, especially in defence drone technology and satellite optics.

Analyst Reactions

Market experts believe the rally is driven by more than just retail euphoria.

“Paras Defence is riding the wave of a favourable defence policy environment. Its niche capabilities in optics and missile systems make it a valuable play in the small-to-midcap defence space,” said Amit Gupta, Fund Manager at ICICI Securities.

“While the short-term spike may invite profit booking, the medium-to-long-term trajectory remains bullish, especially as India scales up its military modernisation,” noted Rachna Sinha, Equity Strategist at Angel One.

Market Context: Defence Sector in Focus

Defence stocks have been in focus lately amid increased geopolitical instability in South Asia, ongoing border tensions, and India's push to reduce reliance on defence imports. Other players like Bharat Dynamics, HAL, and BEL have also seen renewed investor interest, but Paras Defence has outperformed them in recent sessions.

The Nifty Defence Index has outpaced the broader market, gaining over 7% in the last one week, compared to Nifty 50’s 2% uptick.

Retail and Institutional Buzz

Retail participation in Paras Defence has seen a marked increase on Zerodha and Groww platforms, as shown by volume spikes and increased delivery-based buying. Institutional investors are also reportedly increasing exposure in select defence names, sensing strong order visibility and government support.

The stock’s average daily volume over the past week has been 3.2 times higher than its 1-month average, indicating strong accumulation.

Investor Outlook: Is There More Steam Left?

Paras Defence may still have room to run, say analysts, given its niche expertise and limited competition in core verticals. However, investors are advised to remain cautious of short-term volatility after such a rapid climb.

“Momentum is clearly in the stock’s favour, but fresh entry at current levels should be done in tranches or after a small correction. Those holding from lower levels can consider partial booking,” said Anjali Desai, Senior Analyst at Motilal Oswal.

From a valuation perspective, Paras Defence is now trading at a trailing P/E of ~65x, which is elevated compared to its 5-year average of 38x — a sign that the stock may be priced for perfection.

Paras Defence’s meteoric rise is reflective of larger tailwinds in the Indian defence ecosystem. With strategic wins, solid earnings, and favourable policy winds, it remains a stock to watch. Yet, prudent investing strategies — especially amid such sharp rallies — are essential. As always, diversification and due diligence remain key in these volatile segments.