Defence index soars 5% in 1 week; what's driving Paras, Data Patterns?

At 01:40 PM on Friday; Nifty India Defence index was the top gainer among sectoral indices, up 0.85 per cent as compared to 0.43 per cent decline in the Nifty 50.

Defence companies share price today

 

Shares of defence companies continued their upward movement, outperforming the market, with the Nifty India Defence Index surging 5 per cent in the past one week. In comparison, the Nifty 50 was up 1.5 per cent during the period.

 

At 01:40 PM; Nifty India Defence index, the top gainer among sectoral indices, was up 0.85 per cent, as compared to 0.43 per cent decline in the Nifty 50.  Paras Defence and Space Technologies, Bharat Dynamics, Zen Technologies, Dynamatic Technologies and Garden Reach Shipbuilders & Engineers rallied between 5 per cent and 10 per cent.

 

Data Patterns India, MTAR Technologies, BEML, Unimech Aerospace and Manufacturing, Mazagon Dock Shipbuilding and Cochin Shipyard were up in the range of 2 per cent to 3 per cent.

 

In the past one week, the stock price of Data Patterns (India) has soared 19 per cent, followed by Paras Defence (up 18 per cent) , Bharat Dynamics and Dynamatic Technologies (up 10 per cent each).  CATCH STOCK MARKET LIVE UPDATES TODAY

What’s driving defence stocks like Paras, Data Patterns?

 

Paras Defence and Data Patterns reported strong earnings for the second quarter of the financial year 2025-26 (Q2FY26), with healthy order book positions.

 

Data Pattern’s revenue increased by 238 per cent year-on-year (YoY) and 210 per cent quarter-on-quarter (QoQ) to ₹307.5 crore in Q2FY26, led by strong execution. EBITDA was up 99.7 per cent YoY (+113.5 per cent QoQ) to ₹68.5 crore. Profit after tax (PAT) increased by 62.5 per cent YoY and 92.9 per cent QoQ to ₹49.2 crore. 

 

EBITDA margin contracted by 1,541 bps YoY (-1002 bps QoQ) to 22.3 per cent, on account of execution of lower-margin strategic contract worth ₹180 crore during the quarter. However, the management is confident of achieving regular historical margins for the rest of the year.

 

As on September 30, 2025, including orders negotiated of ₹552.08 crore, the total order book will be ₹1,286.98 crore, Data Patterns said. The company said it successfully completed the Site Acceptance Tests of Transportable Precision Approach Radars (T-PAR) delivered to European Countries. This is the first export Radar, fully developed by Data Patterns, it added.

 

“Our order inflow in the first half of the current financial year is in line with expectations, and our order book includes two significant orders for the EW products developed with QIP funds. We are optimistic that these initiatives will soon translate into high-value contracts,” the management said.

 

In Q2FY26, Paras Defence posted 53 per cent YoY growth in PAT at ₹19.46 crore, as against ₹12.70 crore in Q2FY25. Revenue from operations grew 21 per cent to ₹105.75 crore from ₹87.09 crore in the year ago quarter.

 

Despite a temporary contraction in operating margin –  driven by a strategic, low-margin contract – the company’s execution is strong, with profitability expected to normalise as the product mix stabilises.

 

The company’s order book stands at ₹673.6 crore and complemented by a healthy ₹2,000–3,000 crore pipeline across radars, electronic warfare and avionics programs. Paras Defence, along with its subsidiary Paras Anti-Drone Technologies, has been at the forefront of developing Indigenous Counter-UAV systems that address the complexities of hostile drone engagements.

 

Analysts at Choice Institutional Equities expect over 25 per cent revenue growth in FY26, supported by a strong execution momentum, expanding system-level capabilities and operating leverage benefits. Margin is likely to recover towards the guided 35–40 per cent range as deliveries scale up in the second half. In brokerage view, the recent margin compression is a transient phase in an otherwise accelerating growth story. Analysts maintained BUY rating on the stock with an upwardly revised target price of ₹3,300, valuing the company at 45x avg. of FY27/28E EPS.