A defence giant in the making?
why Paras Defence & Space Technologies should be on your radar.
‘..hidden within the unconscious, is an insatiable desire for conflict. So you’re not fighting me, so much as you are the human condition. All I want to do is own the bullets and the bandages. War on an industrial scale, is inevitable.’ ~ Professor James Moriarty [Sherlock Holmes: A Game of Shadows].
Humans keep killing humans — despite all the technological advances that we have made as a species in the last couple of centuries — from computers, to AI, to gene editing, to sending a human on the moon, we still have not reached that stage in our evolution where we can stop killing each other.
We fight over territory, religion, resources. We find new reasons to fight. We fight on social media. We build new technologies and new ways to end human lives.
I do not know when this vicious cycle of killing will end. No one knows. I hope that someday, our species will acknowledge a simple truth. That we are all One. That we all are made of the same thing. And that separation of any Thing from anything, is an illusion.
The end of violence is the beginning of enlightenment. ~ Baba Siddhartha.
The Defence Business
All philosophy aside, if you’re running a defence company — business is a booming. Not only in the USA, but everywhere. India is no exception.
If you look at the picture above, you’ll see that defence funds have delivered stellar returns in the past 1 year — as the world grapples with an uncertain situation in Iran and the future of oil trade at stake.
Share prices of many defence stocks have skyrocketed.
One of the emerging players in this sector is Paras Defence & Space Technologies — a company which is pushing the envelope when it comes to developing cutting edge defence & space tech in India.
At a P/E of 88 times, the stock is not cheap by any measure — however in the absence of earnings call transcripts + limited information shared in the investor PPT, you cannot predict the trajectory that Paras would take in the future.
The management keeps publishing the same PPT every quarter with a few new slides giving out limited information — which is not a bright sign — given that over 40% of equity is held by retail investors in the company.
Business Units
PARAS operates two business units — Optics & Optronics systems [54% of revenue] and Defence Engineering [46% of revenue]
Optics & Optronics — covers various products like space optics, mirrors, infra-red lenses, submarine periscopes, hyperspectral cameras, EO/IR systems.
Defence Engineering — covers electronics [defence control systems, rugged command & control consoles, avionic suites etc.], heavy engineering products [rockets / missile motor tubes, border defence systems] and EMP protection solutions.
The company aims to become an all-round air defence solutions provider.
Cutting edge technologies?
The company is developing various technologies for defence & space applications — let’s take a look at some of the notable products that the company is building:
Submarine Periscopes — this is the ‘eye’ of the submarine, through which people can navigate the surface. The management claims that PARAS is the only company in the whole Asia Pacific region with the ability to manufacture these periscopes. The company is delivering 1 periscope / quarter.
Hyper-spectral cameras — these are imaging spectrometers which capture light across spectral bands (UV, Infra-red) to identify materials and map chemical compositions. These cameras have applications in agriculture, defense, optical space missions etc. Paras claims to be the only private Indian company to make these.
Electromagnetic protection solutions — provides solutions against EMP threats. Claims to be the only company with the capability to provide these solutions.
Optical systems — PARAS makes optical cameras & systems which are used in tanks, artillery, armored vehicles, drones etc. The company has partnered with CONTROP Precision (Israel) for this purpose. Claims to be the only company that makes cameras for drones.
Hydrogen powered drones — the company plans to make hydrogen powered drones in the future, in partnership with HevenDrones (Israel). At what stage of product lifecycle are these drones? When will the company start selling these drones? We don’t know.
Anti-drone solutions — the company is developing drone detection & jamming systems. Again, we have absolutely no information at what stage of development these products are.
Apart from these, the company has recently ventured into semiconductor testing & assembly (OSAT) + development of quantum technologies. Very fancy, yes. Again, we have absolutely no idea when the company will start making money from these segments.
What we know?
Order book — of INR 950 Cr as of 31st December 2025, split between Optics & Optronic systems (53%), Defence Engineering (37%) and Anti-drone systems (10%).
Incorporations, Acquisitions & Divestments — the company incorporated two new subsidiaries in February 2026 — (i) Paras Semiconductors (ii) Paras Avionics and acquired a 49% stake in Himanshi Thermal Solutions while offloading its entire stake in Ayatti Innovative Private Limited for INR 6.99 Cr.
Paras Semiconductors — will be engaged in semiconductor assembly & testing + advanced packaging.
Paras Avionics — will be engaged in manufacturing, testing, repair and overhauling systems for defence & aerospace platforms.
Himanshi Thermal — is in the business of manufacturing fabricated metal products, liquid cold plates for space & airborne applications and vacuum heat treatment services. The company had ZERO revenue in the last 2 years.
Collaborations — PARAS signed an MoU with MicroCon Vision (Israel) to become exclusive partners to bring advanced drone technology to India. The company signed an MoU with Inter-University Accelerator Centre, Delhi to develop commercial grade MRI magnet systems.
PARAS has signed many other MoUs which you can read about here.
Margin Profile — margins in the Optics division is 57% and in the Defence Engineering division is 8%. Why are margins so low in the defence engineering division? Can it sustain the margins in Optics? What is the steady state EBITDA?
What we don’t know?
There’s a lot that we don’t know. Maybe, that is by design — given that the company is in the defence space, where there might be restrictions on how much information you can give out.
However, that shouldn’t stop the company to give basic guidance on how their revenues & margins will evolve over time.
Some other questions that I can think of:
What is the bidding pipeline of the company? What is the bidding to order book conversion ratio? What is the margin profile in the anti-drone business? Why is there such a significant delta in margins between Optics & Defence businesses?
How much CAPEX is the company undertaking every year? Is it setting up new plants? What is the capacity utilization % of existing plants?
Why are the promoters offloading their stake in the company? Is it a profit-booking exercise or something more?
What are the projects in the prototype / development / pre-production stage? Which projects go into volume production in FY27 and beyond?
And most importantly, why is the management not publishing quarterly earnings calls with investors? They seem to meet a lot of analysts, but the transcripts are not available, offering little insight for the investors on the outside.
Why such secrecy?
Conclusion
It is one of those companies, where you don’t have enough information to act upon, but you can see potential.
The management looks very aggressive in terms of acquisitions, setting up new subsidiaries to enter new business streams (semiconductor assembly & packaging) + entering into MoUs / partnerships with established players (CONTROP, MicroCon, HevenDrones etc.)
The company has received orders from various government agencies (MoD, DRDO) which signals confidence of the government in the company’s ability to manufacture indigenous systems for India. This is a VERY positive sign.
Revenue & profit growth has been steady but not explosive in nature.
A low DII participation in the stock, is also a green shoot for me.
Elongated working capital cycles are an industry phenomenon — however I would like to see that number going down, which would signal operational efficiency.
I think PARAS is an exciting company to track, despite the lack of management commentary. It could become a defence GIANT in the future, if all these technologies come full circle and go into production eventually.
Disclosure: I have invested <1% of my portfolio in PARAS Defence & Space Technologies. I would add to my position in case the stock undergoes a significant drop from these levels.
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[Note: The author is not a SEBI registered investment advisor, and the contents of this article do NOT constitute investment advice. Always do your own research before you invest in a company]
Good article!
Generally, I stay away from companies if they are notndoing regular concalls.
Write on krishna defense, they are also doing very well. They have high barrier to entry.
One of the things I hate while reading about a company is that if it doesnt have concalls avlbl. They give a lot of info into the company. I know for some companies it can even be controlled or already scripted but still for the greator majority it helps.