Multibagger defence stock rises 15% on Q1 earnings, raising of funds

Shares of Premier Explosives rose over 15% on Wednesday after the company reported its Q1 earnings. The board of the firm also cleared raising of funds up to Rs 300 crore. Premier Explosives stock rose 15% to Rs 491.90 against the previous close of Rs 426.90 on BSE. Total 1.03 lakh shares of the firm changed hands amounting to a turnover of Rs 4.97 crore on BSE. Market cap of the firm rose to Rs 2636.99 crore. 

Net profit climbed 110% to Rs 15 crore in the June quarter from Rs 7 crore in the year ago period.

Revenue climbed 72% to Rs 142 crore from Rs 83 crore in the first quarter last fiscal. The revenue was split between defence and space at 86% and bulk explosives at 14%.

Earnings before interest, taxes, depreciation and amortisation rose 35% to Rs 20.9 crore in the last quarter from Rs 15 crore in the previous year.

EBITDA margins slipped 400 basis points to 14.68% from 18.48% in the year-ago period. A rise in material costs as a percentage of sales to 66% from 41% last year led to contraction in margins. 

However, other expenses halved to Rs 9 crore in Q1 from Rs 18 crore last year.

Order book of the firm stood at Rs 988.5 crore in the June quarter, rising 32% from Rs 750 crore at the end of FY25.

Defence comprised 87% of its order book, while explosives and services accounted for 7% and 6%, respectively.

In two years, the multibagger stock has gained 136% and risen 591% in three years. The stock has gained 1662% in five years. 

Premier Explosives Limited is primarily engaged in the manufacture of high energy materials and allied products for the defence, space, mining and infrastructure industries. The company’s geographical segments include India and the Rest of the world. It is focused on developing and manufacturing solid propellants for rockets and strap-on motors for satellite launch vehicles.