Paras Defence shares jump 10% after adjusting for 1:2 stock split

Shares of Paras Defence and Space Technologies Ltd. surged up to 10% on Friday, July 4, 2025, as the stock began trading ex-split following its 1:2 stock split. The company had set July 4 as the record date for this corporate action, meaning shareholders holding the stock at the close of Thursday’s trading were eligible to receive the split shares.

Details of the Stock Split

Announced on April 30, 2025, Paras Defence’s board approved a 1:2 stock split, converting one equity share with a face value of ₹10 into two shares with a face value of ₹5 each. This marked the company’s first-ever stock split, aimed at increasing the number of outstanding shares and improving trading liquidity by making the stock more affordable for retail investors. Investors purchasing shares on or after July 4 are not eligible for the split.

Market Performance

On Thursday, Paras Defence shares closed 0.24% lower at ₹1,692.20. Post-split, the stock opened at ₹855 on the BSE and quickly hit a 10% upper circuit at ₹933.50, reflecting strong market response. The company’s market capitalization stood at ₹7,522 crore, with trading volume reaching 5.69 lakh shares, significantly higher than the two-week average of 1.32 lakh. Over the past six months, the stock has gained 75%, and it is up 950% from its IPO price of ₹175 (adjusted to ₹87.5 post-split) in September 2021.

Company and Industry Context

Paras Defence, a leading Tier 2 defence engineering firm, offers a wide range of products for defence and space applications, including optics, electronics, and heavy engineering. The company has bolstered its position through partnerships, such as a recent MoU with Israel-based HevenDrones to develop logistics and cargo drones under India’s Make in India initiative. It also secured a ₹1.42 billion contract from DRDO for an anti-drone laser system and has become the exclusive supplier of advanced drone camera technology in India.

The company’s Q4 FY25 results showed a 97% jump in net profit to ₹19.7 crore and a 35.8% revenue increase to ₹108.2 crore, with EBITDA margins expanding to 26.2% from 15.6%. Its order book exceeds ₹9 billion, with expectations to reach ₹15 billion soon.

Israel Exposure and Supply Chain

In June 2025, Amit Mahajan, Director at Paras Defence, addressed concerns about the company’s exposure to Israel amid regional tensions. He noted that the firm’s focus is on technology transfer rather than exports, with only 5% of its exports tied to Israel. Mahajan anticipated a one-to-two-week delay in tech transfers but emphasized no significant supply chain disruptions for component imports.

Investor Considerations

The stock split has made Paras Defence more accessible, but some trading platforms initially displayed a 50% drop due to unadjusted prices, causing confusion. Analysts advise caution, with Hardik Matalia of Choice Broking noting the stock’s consolidation phase around ₹1,654 and suggesting traders wait for a breakout above ₹1,800 for bullish momentum. The stock’s high price-to-earnings ratio of 113.58 and recent volatility (down 42.13% over the last five trading sessions) warrant careful evaluation.

Paras Defence’s strong fundamentals, growing order book, and strategic partnerships position it well in India’s expanding defence sector. However, investors should assess valuations and monitor geopolitical risks before making decisions.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Stock market investments are subject to risks. Consult a qualified financial advisor before investing.

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