Paras Defence (PARAS)

FairStock Score: 28/100 — RISKY

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Sales growth of 23.99% and profit growth of 21.08% show a solid expansion phase, with latest quarter net profit of ₹17 Cr on sales of ₹106 Cr.
• Piotroski F-Score of 7/9 indicates decent financial quality and limited red flags in the fundamentals.
• Debt-to-equity of just 0.08 gives balance-sheet strength and financial flexibility.
• Promoter holding at 53.20% aligns owner-managers with minority shareholders.
• ROE of 15.54% and ROCE of 15.61% are respectable, though not enough for the current multiple.

Concerns

• P/E of 69.99 and P/B of 14.72 leave no margin of safety; PEG of 3.11 indicates growth is more than priced in.
• Dividend yield of 0.04% means investors rely purely on capital appreciation; there is no income support if the price falls.
• FairStock Score of 18/100 labels the stock risky, and the 52-week range of ₹580.50 to ₹1,444.95 signals high volatility.
• ROE and ROCE around 15.5% are not extraordinary for a company trading at such a premium valuation.

AI Analysis

At ₹829.75, Paras Defence is asking me to pay ₹5,140 Cr for a business that earned a very modest dividend of 0.04%. I have seen enough markets to know that a P/E of 69.99 and a P/B of 14.72 leave almost no room for error. The growth is real: sales grew 23.99%, profit grew 21.08%, and the latest quarter delivered ₹17 Cr net profit on ₹106 Cr sales. That is encouraging. A Piotroski score of 7/9 says the accounts are not deteriorating, and a debt-to-equity ratio of 0.08 gives management breathing room. Promoter holding of 53.20% is a positive sign. But a 15.54% ROE and 15.61% ROCE do not justify a 70-times earnings multiple. For that price, I would want a business with an enormous moat and a long runway of very high returns on capital. From these numbers, I see a well-run, growth-stage defense company, not a proven compounding machine. The PEG ratio of 3.11 confirms that the market has already priced in years of excellent performance. The 52-week range of ₹580.50 to ₹1,444.95 reminds me how quickly sentiment can change. FairStock's score of 18/100 is a red flag, and it aligns with my instinct. In Graham's words, the investor's chief problem is himself; I must not mistake a wonderful industry for a wonderful investment at this price. I would keep Paras Defence on my watchlist and wait for either a much lower price or a track record that matches the multiple.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer