This small-cap defence stock is engaged in manufacturing defence and aerospace products, supplying explosives, and providing services to important sectors such as defence, space, and mining industries, in focus after the company is trading at a discount of more than 63 percent.
Stock Price Movement:
With a market capitalization of Rs. 1,824.65 crores, the share of Premier Explosives Limited has reached an intraday high of Rs. 361.80 per equity share, rising nearly 6.18 percent from its previous day’s close price of Rs. 340.75.
Since then, the stock has retreated and closed at Rs. 339.40 per equity share. The stock is currently trading at 62.64 percent below its 52-week high of Rs. 909.35.
Company Overview:
Premier Explosives Limited was established in 1980 by Dr. A.N. Gupta and specializes in manufacturing high-energy materials and allied products. The company caters to mining, infrastructure, defence, space, and homeland security sectors, producing explosives, detonators, solid propellants, and defence accessories
Management Guidance:
The company expects its revenue for the current financial year to range between Rs. 450-500 crores and predicts a 15-20 percent growth next year, driven by its emphasis on local manufacturing under the Atmanirbhar Bharat initiative.
Clientele:
Premier Explosives Limited works with key clients in the defence and space industries, such as Bharat Dynamics Limited, Bharat Electronics, ASL, ISRO, and the Electronics Corporation of India.
Order Book:
Premier Explosives Limited has a strong order book of Rs. 739.3 crore as of December 2024, which is approximately 2.7 times its FY24 revenue. Although this is lower than the Rs. 964.7 crore recorded in March 2024.
The order book’s segmental breakdown indicates that 81 percent of its business comes from defence, 15 percent from explosives, and 4 percent from services, highlighting its diversified operations.
Product and service offerings:
The company makes bulk and packaged explosives, detonators, and fuses. It also produces solid propellants for missiles like Akash and Astra, as well as pyro devices such as chaff, infrared flares, and explosive bolts. Additionally, the company runs and maintains solid propellant plants for ISRO and DRDO.
Manufacturing Facilities:
Premier Explosives Limited has seven manufacturing facilities located in states such as Telangana, Madhya Pradesh, Maharashtra, and Tamil Nadu. These facilities enable the company to produce and supply defence explosives and other related products.
Recent quarter results:
Premier Explosives Limited’s revenue has increased from Rs. 44.56 crore in Q3 FY24 to Rs. 165.92 crore in Q3 FY25, which has grown by 272.35 percent. The net profit has also grown by 450.30 percent from Rs. 1.67 crore in Q3 FY24 to Rs. 9.19 crore in Q3 FY25.
Premier Explosives Limited’s revenue and net profit have grown at a CAGR of 2.45 percent and 18.47 percent, respectively, over the last five years.
In terms of return ratios, the company’s ROCE and ROE should be 18 percent and 13.5 percent, respectively. Premier Explosives Limited has an earnings per share (EPS) of Rs. 5.86, and its debt-to-equity ratio is 0.40x.
Written By – Nikhil Naik
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
