Paras Defence Targets Up to 40% Revenue Growth in FY26

Introduction

Paras Defence and Space Technologies is confident in achieving significant revenue growth for the fiscal year 2026, maintaining its guidance despite a moderate performance in the first nine months. The company's management anticipates a substantial increase in execution-led revenues during the fourth quarter, a period typically marked by heightened activity across the defence sector. This final quarter is expected to be pivotal in meeting the full-year target, underscoring the cyclical nature of defence contract execution.

Management's Growth Projections

In a recent discussion, Amit Mahajan, Director at Paras Defence and Space Technologies, reaffirmed the company's full-year revenue growth guidance of 30% to 40%. He projects that the company's revenues for FY26 will be in the range of ₹450 crore to ₹500 crore. This forecast relies heavily on the performance in the January-March quarter, which is traditionally the most productive period for defence manufacturers in India as government budgets are utilized before the fiscal year concludes. After recording 19% revenue growth in the first three quarters, the company is banking on accelerated project execution to bridge the gap and achieve its ambitious annual target.

Robust Order Book and Future Pipeline

The company's confidence is supported by a healthy order book and a strong pipeline of upcoming contracts. As of the third quarter, Paras Defence holds an order book valued between ₹900 crore and ₹950 crore. Management expects this figure to grow significantly in the coming months. Mahajan anticipates that the order book will reach ₹1,100 crore to ₹1,200 crore by the end of the financial year, providing strong revenue visibility for FY27. This growth is expected to be driven by increasing demand for the company's specialized products.

Key Growth Segments

Future order inflows are anticipated from several high-technology segments where Paras Defence has established expertise. These include optics and optical systems, laser-based solutions, and ground-to-space telescopes. Additionally, the defence electronics division is expected to contribute significantly to the order book. The focus on these niche, high-value areas positions the company to capitalize on the modernization and indigenization initiatives within India's defence and space sectors.

Q3 Financial Performance

For the third quarter of FY26, which ended in December 2025, Paras Defence reported steady financial results. The company's performance provides a baseline for the expected surge in the final quarter.

These figures indicate a stable operational foundation from which the company plans to launch its intensive fourth-quarter execution drive.

Margin Improvement on the Horizon

Alongside revenue growth, Paras Defence expects an improvement in its profitability margins. The management is targeting an EBITDA margin between 27% and 30% and a Profit After Tax (PAT) margin in the range of 18% to 20%. This anticipated enhancement in margins is linked to the execution of higher-value orders and improved operational efficiencies as the company scales its output in the final quarter.

Market and Stock Performance

The defence sector continues to be a focus area for investors, driven by government policies promoting self-reliance and increased capital outlay. Paras Defence's stock performance reflects this interest, though it has seen some volatility. The company's ability to meet its guidance will be a key factor for investors moving forward.

Analysis

The management's reiteration of its 30-40% growth guidance is a strong statement of confidence in its execution capabilities. The heavy dependence on the fourth quarter is a known characteristic of the defence industry but also presents an execution risk. However, the projected growth in the order book, particularly in strategic areas like optics and defence electronics, aligns well with the long-term priorities of the Indian government. If the company successfully delivers in Q4, it will validate its strategy and strengthen its position as a key supplier in the domestic defence and space ecosystem.

Conclusion

Paras Defence and Space Technologies is poised for a strong finish to FY26, with its growth trajectory hinging on a high-performance fourth quarter. The company's firm guidance, backed by a robust and expanding order book, signals a positive outlook. Stakeholders will be closely watching the company's execution over the next few months, as it works to convert its strong order pipeline into revenue and improved profitability.