Paras Defence FY26: Scaling Optics, Anti-Drone, and Defence Engineering With Improving Margins

Paras Defence and Space Technologies Limited closed FY26 with a clear step-up in scale and profitability. Consolidated revenue from operations rose to 476.57 crore, up from 364.66 crore in FY25. Operating profitability strengthened as EBITDA increased to 120.46 crore and the EBITDA margin expanded to 26 percent from 22 percent in FY25. Profit after tax also improved sharply to 89.46 crore in FY26 versus 61.49 crore in FY25.

The tone of the investor presentation is consistent: the company wants to be a full-stack defence and space engineering player, with a heavy emphasis on high-end optical systems, electro-magnetic protection, anti-drone and radar sub-systems, and newer areas such as high power lasers, quantum technologies, avionics, and advanced semiconductor packaging through an OSAT setup. Alongside this broad ambition, the company is also highlighting that it has a growing installed base, expanding funnels for specific products, and a rising consolidated order book.

What stands out in FY26 is not only the growth in revenue, but the margin profile. Paras moved from 97.21 crore EBITDA in FY25 to 120.46 crore in FY26, and from 61.49 crore PAT to 89.46 crore, while maintaining a strong order book of 986 crore at Mar-26. The company also guided for 30 to 40 percent revenue growth in FY27 and FY28, with profitability to be maintained or slightly improved compared to previous years.

FY26 performance: growth with a stronger earnings profile

The five-year trend shows a steady build-up in revenue, with a sharper acceleration in FY25 and FY26. Revenue moved from 182.6 crore in FY22 to 222.4 crore in FY23, 253.5 crore in FY24, 364.66 crore in FY25 and 476.57 crore in FY26. EBITDA was 51.9 crore in FY22 and 56.8 crore in FY23, dipped to 51.05 crore in FY24, and then rose to 97.21 crore in FY25 and 120.46 crore in FY26. PAT followed a similar pattern, rising from 27.1 crore in FY22 to 36.0 crore in FY23, falling to 30.04 crore in FY24, and then increasing to 61.49 crore in FY25 and 89.46 crore in FY26.

The quarterly snapshot shared in the presentation shows Q4 FY26 consolidated revenue at 171.31 crore, consolidated EBITDA at 42.6 crore, and consolidated PAT at 38.88 crore. On a standalone basis, Q4 FY26 revenue was 125.58 crore, EBITDA was 30.27 crore, and PAT was 25.96 crore.

The investor takeaway is that Paras is reporting stronger profitability at higher scale, and that the company believes it can protect these gains while targeting faster growth. The presentation does not break down profitability by segment, but it does provide a consolidated revenue split and an order book bifurcation, which help explain what is driving the business mix.

Mix and order book: optics remains the anchor, subsidiaries are emerging

Paras reported a consolidated revenue split for FY26 that highlights the companys dual engine. Optics and optronic systems contributed 42 percent of revenue, defence engineering contributed 46 percent, and subsidiaries contributed 12 percent.

Order book concentration remains high in the core. The order book bifurcation at Mar-26 is 55 percent optics and optronic systems, 35 percent defence engineering, and 10 percent anti-drone. The rising order book over multiple years suggests that the company is building longer visibility: 215.1 crore at Mar-21, 301.9 crore at Mar-22, 393.0 crore at Mar-23, 576.0 crore at Mar-24, 928.0 crore at Mar-25, and 986.0 crore at Mar-26.

This mix matters because the investor presentation frames Paras as one of the few Indian private players that can design, manufacture, integrate, test, and qualify complex optical systems for space programs. It also positions the company as a turnkey provider in electro-magnetic protection solutions, and a builder of anti-drone technologies including radars, software defined radios, phased arrays and advanced antennas.

In practical terms, the mix suggests that the company is trying to build a stable core in optics and defence engineering while using subsidiaries to expand into adjacent, higher-growth categories. The 12 percent subsidiary revenue share in FY26 is still modest, but the breadth of platforms, partnerships, and product funnels described in the presentation point to an effort to create multiple second legs of growth.

Product-led growth: funnels, platforms, and repeatability

Paras uses its investor presentation to show that several products are moving from one-off development to repeatable production. The submarine periscope is a strong example. The company states it is the only company in the Asia Pacific to develop and manufacture a submarine periscope, with delivery of one periscope every three months and a funnel of 36 plus units. It also cites domestic and world market opportunities indicating yearly revenue of 200 crore plus.

The hyper-spectral camera program is another anchor. Paras describes itself as the only Indian private company to develop and manufacture a hyper-spectral camera for defence and space, designed, developed and manufactured in India by Paras, and to be jointly launched by DRDO and ISRO. The presentation emphasizes that these cameras are part of almost every optical space mission, and also lists broader applications including defence, medical and agriculture.

In electro-magnetic protection solutions, Paras positions itself as the only Indian company to offer turnkey electro-magnetic protection solutions, with certified and field proven performance against electro-magnetic pulse threats. It highlights turnkey semi or full anechoic chambers and collaboration with a global leader for antenna test range solutions. It also cites a funnel of 350 crore plus over the next two to three years.

The border defence system is presented as a large-volume opportunity if advanced trials convert into scaling. Paras calls it the first Indian border defence system to protect frontline soldiers from facing firing, and states it is rugged and field trialed, with surveillance unit, weapon unit and control system, and that it is designed, developed and manufactured by Paras in collaboration with DRDO. The stated potential is 4,000 units over the next five to seven years plus global market.

In optical systems, Paras highlights field proven EO and IR stabilized optical systems with day and night channels, precision tracking and laser ranging. The company states an extensive funnel of over 5,000 units in the next three to seven years for Sight 25HD, and an estimated opportunity size of 6,000 plus units over the next three to five years across platforms like armoured vehicles and air defence systems.

Anti-drone is being built as both a product portfolio and a technology platform. The presentation lists integrated detection and jamming systems like Dexter 20 and a jamming gun system Terminator, along with other product lines such as drone detection systems, jamming systems and tactical communications. It also highlights work in RF and microwave custom developments, advanced phased arrays, next generation software defined radio, complex antenna systems and counter UAV technologies.

Strategy and execution: partnerships plus in-house capability

A recurring theme across the presentation is partnership-led expansion combined with in-house design and manufacturing. Paras has a joint venture with Controp Precision Technologies, Israel, described as a world leading exclusive EO and IR company, to manufacture EO and IR systems in India under Make in India. It also has a joint venture with Heven Drones, Israel, for hydrogen powered drones.

On hydrogen powered drones, the company calls its platforms Indias first ready-to-fly hydrogen powered drones, with over 12 hours of flight time and over 22 kg payload. It also lists models such as Raider, H2D250 and H2D55 with payload and endurance specifications. These are positioned for use cases requiring higher endurance and heavier payload.

In inertial navigation systems, Paras states it offers a full range of inertial navigation systems in partnership with Cielo, Israel, describing them as field proven with high accuracy and customizable to user requirements across land, air, naval, submarine and space platforms.

The company is also expanding into newer domains where India is building domestic capacity. It outlines OSAT for advanced heterogeneous packaging, aimed at chiplet and system-level integration, focusing on defence, high performance computing and networking. It describes the OSAT as export-grade and aligned to international standards.

The future technologies section frames quantum communications and quantum sensing as a strategic adjacency, with near to mid-term opportunities in quantum sensing and mid to long-term opportunities in quantum communication.

Under solutions for air defence applications, the company lists EO and IR systems, electronic warfare systems, high power laser systems, C4I command and control systems, and high power EM systems. It also positions itself as the first company in India for high power laser defence against hostile aerial platforms such as drones, missiles and aircraft, with an addressable market of approximately 25,000 crores.

Investors should read this strategy as a portfolio approach. Paras is not relying on a single product. It is building multiple programs across optics, engineering, electronics, RF, and newer tech areas, while using joint ventures and partnerships to shorten time to market. The key execution question is how efficiently the company converts the large funnels and stated opportunities into shipped units while sustaining the FY26 margin expansion.

What to track next

Paras enters FY27 with three visible anchors: a growing consolidated order book of 986 crore, a business mix led by optics and defence engineering, and improving profitability with EBITDA margin at 26 percent and PAT margin at 19 percent in FY26. Management guidance is clear on growth, targeting 30 to 40 percent revenue increase in FY27 and FY28 while maintaining or slightly improving profitability.

The next phase will likely be defined by conversion. Large funnels are stated across submarine periscopes, electro-magnetic protection projects, optical systems such as Sight 25HD, and the border defence system. The anti-drone portfolio is also being positioned for deeper technology development. If even a portion of these convert at scale, Paras could continue to grow without diluting margins.

For investors, the FY26 story is disciplined scaling. The company expanded revenue and improved margins, while keeping the order book near 1,000 crore and highlighting multiple long-duration platforms in defence and space. The near-term test will be whether execution keeps pace with the breadth of ambition, and whether the company can sustain the stronger profitability profile as it ramps deliveries across optics, engineering, and subsidiary-led programs.