Paras Defence Shares Surge 10% on License to Manufacture MK-46 and MK-48 Machine Guns

Shares of Paras Defence and Space Technologies soared 10% in early trade on January 7 after the company announced it had been granted a manufacturing license under the Arms Act of 1959. The stock hit its upper circuit, trading at ₹1,066.50 per share.

New Manufacturing License

The newly granted license, issued by the Department for Promotion of Industry & Internal Trade and Ministry of Commerce & Industry, allows Paras Defence to produce MK-46 and MK-48 Belt-fed Light Machine Guns (LMGs). These modernized LMGs are designed with enhanced capabilities, and the company plans to manufacture 6,000 units annually. The license is valid for a lifetime and is expected to bolster the company's manufacturing capabilities significantly.

Stock Performance

The news caused a sharp rebound in Paras Defence shares, initially opening slightly lower at ₹960.65 but surging nearly 10% to its upper price band. At 10:05 AM, the stock was trading 6.8% higher at ₹1,035.30. Despite this spike, the stock remains 49% below its 52-week high of ₹1,592.75. However, it has risen 75% from its 52-week low of ₹608.75.

The stock has had a mixed performance in recent months, declining 8% over the past month and 33% in six months. Nevertheless, it has gained 32% in the last year.

Recent Business Updates

Paras Defence has been making strides in other areas as well:

• The company inaugurated a state-of-the-art optical systems testing facility in Navi Mumbai, Maharashtra, in late November.
• The same month, credit rating agency ICRA upgraded its outlook from "Negative" to "Stable" while reaffirming its ratings for long-term and short-term facilities.
• Additionally, Paras Defence secured a ₹61.43 crore order from the Ministry of Defence for upgrading Optronic Periscope Sights and related accessories for Indian Naval Submarine applications.

Outlook

The new manufacturing license is expected to open new growth opportunities for Paras Defence and enhance its market presence in the defence sector. With recent business developments and improved ratings, the company is well-positioned for future growth.