Premier Explosives is indeed showing some explosive run on the bourses today. The stock is currently up 10% at Rs.269 with an intra day high of Rs.284. Volumes have jumped up over 12 times.

The stock is reacting to the company receiving the Industrial License from the Department of Industrial Policy and Promotion (DIPP) for defense products, flexible liner shape charge, explosives reacting armour and single base propellant.  Though it would take a while for this DIPP nod to get converted into actual orders, the company is hopeful that in current fiscal it would have an order book of around Rs.150-200 crore.

This is a very good development and seems like a follow-up of another approval from DIPP last month – for making ammunition such as 40 mm and above caliber rockets and missiles, cartridge explosives.

The company had ended FY15 with a net sales of Rs.150 crore and net profit of Rs.5 crore. For FY16, it has guided a topline of Rs.200 crore. Its total order book size at end of FY15 was at Rs.185 crore with defence orders contributing 49%, explosives made up 43% and services comprised the balance 8%.