Premier Explosives Limited (NSE: PREMEXPLN) recorded a 51% year-over-year drop in quarterly revenue due to high base effects from the previous year. However, its order book surged to ₹12,946 million, representing approximately 3.1 times its FY25 revenue, providing multi-year visibility.
The company reported a significant decrease in quarterly consolidated revenue to ₹814.28 lakhs, compared to ₹16,613.86 lakhs in the same period last year. Despite the quarterly contraction, the nine-month performance showed growth in profit after tax (PAT), supported by a robust order pipeline in the defense and space sectors.
Key Development
The primary driver for the sharp decline in quarterly revenue was attributed to a high base effect from elevated chaff and flare dispatches in the corresponding period last year, alongside shifts in execution timing. Additionally, the company recognized an exceptional expense of ₹520 lakhs for the nine months ended December 2025, representing ex-gratia compensation for employees affected by an accident at a manufacturing facility.
Financial Performance
For the quarter ended December 31, 2025, consolidated total revenue stood at ₹818.28 lakhs, a decline from ₹16,613.86 lakhs in the prior year. Consolidated profit after tax (PAT) for the quarter was ₹608.86 lakhs, down from ₹923.30 lakhs year-over-year. Earnings per share (EPS) for the quarter fell to ₹1.13 from ₹1.71.
On a nine-month basis, consolidated total revenue reached ₹32,852.28 lakhs, compared to ₹34,497.33 lakhs in the previous year. Despite the slight revenue dip over nine months, PAT increased to ₹3,924.29 lakhs from ₹2,498.67 lakhs, reflecting improved margins.
Total expenses for the quarter were ₹7,369.08 lakhs, with the cost of raw materials consumed totaling ₹4,223.29 lakhs. The company’s paid-up equity share capital remained at ₹1,075.22 lakhs, while other equity (excluding revaluation reserves) was recorded at ₹23,505.15 lakhs as of March 31, 2025.
Product Highlights
The company continues to focus on high-energy materials, including solid propellants, explosives, and countermeasures. It is currently the only qualified Indian company for countermeasures such as chaffs and flares and specializes in the export of fully assembled rocket motors.
The company is expanding its portfolio under its “Vision 2030” strategy to include air target imitators, loitering missiles, and medium-to-large caliber ammunition for the Indian armed forces. It also maintains long-term operation and maintenance (O&M) services for solid propellant plants at ISRO and DRDO facilities.
Investment Thesis: (Bull vs. Bear)
Bull Case: Company’s record order book of ₹12,946 million provides a strong multi-year revenue runway. The company operates in a high-barrier industry with specialized technological capabilities and is a primary beneficiary of the “Make in India” defense push. Nine-month PAT margins have significantly improved to 13.1% from 7.2% year-over-year.
Bear Case: The company exhibits high quarterly volatility due to execution timing and reliance on large-scale defense dispatches. Revenue and PAT for Q3 showed a sharp year-over-year decline. Operational risks are present, as evidenced by recent exceptional expenses related to a manufacturing accident.
Business Outlook and Strategy
Management’s stated strategy emphasizes enhancing production capacity for high-explosive raw materials like RDX, HMX, and TNT to meet rising domestic and international demand. The company intends to increase its participation in missile integration as a strategic partner in DRDO schemes and expand its export contributions, which typically offer higher margins. The company is also refurbishing missiles and developing canopy severance systems for aircraft.
Vision 2030
The company has positioned export expansion as a core pillar of its Vision 2030 strategy, targeting higher-margin international markets across both its industrial and defense explosives segments. Management aims to scale overseas contributions by leveraging its established export presence in commercial explosives and deepening its focus on specialized high-energy materials. The company holds a differentiated domestic position as the only qualified Indian supplier for select countermeasures and as an exporter of fully assembled rocket motors, capabilities it intends to deploy to capture incremental share in the expanding global defense trade.
Operationally, company is aligning manufacturing capacity to support this push, with its Katepally facility in Telangana mandated to secure international orders for solid propellants, rocket missiles, and ammunition products. Planned capacity additions for key raw materials such as RDX, HMX, and TNT are intended to meet anticipated export demand. The strategy is aligned with India’s broader defense indigenization drive, with national defense exports reaching approximately ₹23,622 crore in FY25 and a stated target of ₹50,000 crore by 2029, positioning the company to participate in the sector’s accelerating global integration.
Sector & Macro Context
The Indian defense sector is currently supported by a record FY26 budget of ₹6,81,000 crore, with a capital outlay of ₹1,80,000 crore ensuring multi-year procurement visibility. Government initiatives, including five indigenization lists covering 5,500 plus items, are structurally boosting domestic manufacturing. Defense production in India reached approximately ₹1,50,000 crore in FY25, with a government target of ₹3,00,000 crore by FY29.
Technical Evaluation
The company’s quarterly consolidated revenue of ₹818.28 lakhs represents a multi-quarter low, significantly below the ₹9,864.39 lakhs reported in the preceding quarter (Q2 FY26). However, the long-term trend in the order book remains positive, growing from ₹3,890 million in March 2022 to ₹12,946 million in December 2025. The current order book is heavily weighted toward defense (92%), with explosives and services making up the remainder.