Shares of this defence stock engaged in the manufacturing of industrial explosives and detonators hit a 5 percent upper price band after signing a Memorandum of Understanding (MOU) with Astra Microwave Products Limited to develop and sell multiple products jointly.
Share price movement
In Wednesday’s trading session, the shares of Premier Explosives Limited hit a 5 percent upper price limit reaching an intra-day high of Rs.588.05 per share, from its previous close of Rs.560.05 apiece. The share has retreated since then and is trading at Rs.580 apiece.
Rationale for Rise
Premier Explosives Limited has signed an MOU with Astra Microwave Products Limited to form a strategic alliance for the joint development and marketing of various products.
This collaboration is expected to enhance both companies’ capabilities in the defense sector, with Premier Explosives focusing on high-energy materials and Astra Microwave specializing in RF and microwave systems for defense applications.
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Their joint efforts will focus on specific products such as flares, explosive bolts, pyro devices, smoke markers, cable cutters, tear gas grenades, and pyrogen igniters, which are essential for defense and space applications.
Geographical and Segmental Revenue
Premier Explosives Limited’s revenue distribution is primarily focused on the Defence sector, accounting for 85 percent of total revenue. Services contribute 12 percent, while Explosives make up 3 percent.
Geographically, the company derives 92 percent of its revenue from domestic markets and 8 percent from international markets.
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Financial Performance
In its Q1 FY25 financial results, Premier Explosives Ltd reported revenue of Rs.82.86 crore, reflecting a 34 percent increase from Rs.61.95 crore in the same quarter of the previous year. Net Profit for the period decreased to Rs.7.33 crore, compared to Rs.8.26 crore in the same period.
Company Profile
Premier Explosives Ltd (PEL) manufactures industrial explosives and detonators for the mining, infrastructure, defense, and space industries. Additionally, it provides operation and maintenance (O&M) services for solid propellant plants at ISRO’s Sriharikota Centre and the Solid Fuel Complex at Jagdalpur, under DRDO’s oversight.
Written by – Siddesh S Raskar
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