January 7, 2025
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Paras Defence gets license to manufacture light machine guns
Shares of Paras Defence and Space Technologies Ltd surged over 7% to Rs.1,040.35 per share on January 7, following the approval of a license under the Arms Act, 1959. During early trading, the stock rose by as much as 10%. Despite this rise, the shares are still 40% below their peak of Rs.1,592.7.
The license, granted by the Department for Promotion of Industry & Internal Trade (DPIIT) under the Arms Act, allows the company to manufacture the MK-46 and MK-48 Belt-fed Light Machine Guns (LMGs). These modernized, enhanced LMGs are expected to have an annual production capacity of 6,000 units each, as stated by the company in an exchange filing. The license has a lifetime validity.
Paras Defence had earlier reported strong financial results for the second quarter of FY2025, with a 45% year-on-year increase in net profit, which reached Rs.12.70 crore compared to Rs.8.76 crore in the same quarter of the previous fiscal year. The company’s EBITDA margin expanded to 26.1%, surpassing the 25.3% margin from the previous year.
In November 2024, the company announced receiving an order worth approximately Rs.61.43 crore (inclusive of taxes) from the Instruments Research and Development Establishment (IRDE), Ministry of Defence, Government of India. The order involved upgrading the Optronic Periscope Sight with accessories, including an ESM Warner, for Indian naval submarines.
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