Shares of Paras Defence and Space Technologies Ltd skyrocketed on Friday, registering 9% gains to reach an intraday high of ₹ 545.40 apiece. This happened after the company inked a joint venture with Israel-based Controp Precision Technologies. At 12:41 PM, the company’s shares were trading at ₹ 541.10 apiece, up 8.23%.
Paras Defence and Space Technologies (PDST) is engaged in the designing, developing, manufacturing, and testing of a variety of defence and space engineering products and solutions. It caters to four major segments – Defence & Space Optics, Defence Electronics, Heavy Engineering and Electromagnetic Pulse Protection Solutions.
According to an exchange filing, the company has entered into a joint venture agreement with Controp Precision Technologies, Israel, to undertake the manufacturing and implementation of ElectroOptic (“EO”)/Infra-Red (“IR”) Systems for various applications in accordance with the Government of India’s Make in India initiative.
Paras Defence will have a 30% stake in the joint venture, whereas Controp will have a 70% stake. Paras has the right to nominate one director and Controp has the right to nominate up to 3 directors. Mutual consent of both companies will be required for the issue of securities.
Ace investor Mukul Mahavir Agrawal has 4,35,000 shares or a 1.12% stake in the company.
Paras Defence is a small-cap company with a market capitalization of ₹ 1,950 crores. It has a low return on equity of 9.12%, but an ideal debt-to-equity ratio of 0.04. Its shares were trading at a price-to-earnings ratio of 54.11 which is significantly higher than the industry P/E of 37.25, indicating that the stock might be overvalued as compared to its peers.
Written By Simran Bafna
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