Paras Defence usually treads in non-competitive zones and creates a niche: Amit N Mahajan

Amit N Mahajan, Director, Paras Defence, says “Paras Defence is currently focussing on the domestic market because it is not just that the domestic market is the biggest market, but it also has a preferential procurement policy in favour of companies like us. So, the export market becomes a plan B. Plan A always will be serving the domestic market which is huge and the opportunities, at least for the next 10 to 15 years, are humongous.”

The company has incorporated the wholly-owned subsidiary, Quantico Technologies. What benefit does this bring to the company?Amit N Mahajan: Now, when it comes to Quantico Technologies, because it will be riding on the strengths of Paras Defence’s existing progress into optics, into electronics, and also into security systems, we will be able to make this as the nodal subsidiary in the coming future. Quantum communication is going to be the key technology, key segment because the communication will slowly get on to quantum communication.

This is the vastness of this particular field and you will be amongst the first few companies to venture into this in the country and not just venture with a particular wish and will but also will be backed by your current strength, your current capabilities and you will be able to map your expertise and your manufacturing capabilities to deliver the next generation technologies for the world.

There is a big-ticket defence deal on agenda as the Modi government hosts the French President on the Republic Day. What are the opportunities that will bring to your stable?Amit N Mahajan: Paras Defence is into a wide range of technologies and serving platforms from, say, a small UAV to a large submarine or aircraft carrier or for that matter fighter jets. So, we are across all platforms. Paras will directly or indirectly benefit from any indigenisation or any big or a small deal announcement that the Ministry of Defence makes, because from components to systems, we are thereWe are across all segments, all technologies.

Your current order book is in excess of Rs 600 crore. How is it that you are looking to build the order book further and what are the major orders that you already have in the pipeline?Amit N Mahajan: I would not want to explicitly mention any of the values but the opportunities are looking very promising. The defence sector is very promising right now and this is not just for now, but for the years to stay. The order book is going to be very strong. The bifurcation between the two segments of Paras Defence’s core business, that is optics and optronic systems, and defence engineering as a whole both will have a 50-50% share.

Optics and optronic systems will always lead in terms of its profitability, but defence engineering gives that mobility to the business. These are like the two sides of the same coin and they both are very-very important for our business. Owing to elections, are you seeing any slowing down in decision making, like was witnessed in rail and infra orders?Amit N Mahajan: Defence is isolated from what happens on the political front because this is directly related to national security and no Indian would want our defence forces to have something which is not in the interest of the nation. As long as you are a nationalist, be it any party, your defence requirements and defence procurement policies will be in favourable conditions to the country and hence, I would not say that defence has got anything to do with what happens whether the elections happen or whether they do not happen. This is all completely driven by the national security requirements of the nation and every Indian should be focussing on making sure that we are safe.Considering the strong order book you have, are you on track for a 30% to 40% growth in FY24?Amit N Mahajan: I do not want to put an absolute figure to the revenue as well as the profitability. But I would confirm that we are going to give a strong growth in revenue as the profitability year on year.

What about growth? Is it coming at higher margins or the margins are getting compromised because of the competitive intensity?Amit N Mahajan: Paras is a little spoilt when it comes to this because Paras usually looks for technologies where there is low or minimal competition. We keep R&D as our focus and we make sure that we are trying to do something which other companies do not enter into. None of our customers get offended. So, we are walking a very cautious path. We ensure that we do R&D in areas which are in line with our strengths and we do justice to whatever development activities that we have taken.

We usually tread in non-competitive zones and create a niche for us as well as for our customers. So, we do not have any problem when it comes to competition. Relatively, Paras with its presence of over so many years has created its own value for its customers and is considered to be one of the most reliable companies in its sector.

Your exports are about 20% of the total revenue. How have exports fared this quarter? Will your revenue pie for exports grow?Amit N Mahajan: Paras Defence is currently focussing on the domestic market because it is not just that the domestic market is the biggest market, but it also has a preferential procurement policy in favour of companies like us. So, the export market becomes a plan B. Plan A always will be serving the domestic market which is huge and the opportunities, at least for the next 10 to 15 years, are humongous. So, we would want to focus on the domestic market. Obviously nobody will ignore the export market, but it is a plan B and we don’t have any strategy to become an export house.