Despite the sharp falls on the Tel Aviv Stock Exchange (TASE) today, Israeli defense electronics company Aryt Industries (TASE: ARYT) share price has risen for the fifth consecutive session. The share price is up 20% since the start of the week and up 1,000% since the start of the year. The stock seems to be responding to the excellent financial results published last Thursday, and the company now has a market cap of NIS 4.7 billion.
The reason for the rise in the stock is probably the sharp jump in net profit to NIS 96 million, reported for the first half of 2025, up over 1,500% from the first half of 2024. The annualized net profit rate according to the first half would mean the company is trading at a multiple of 23, which is high for industrial companies in the defense sector. But according to the last four quarters, the company earned about NIS 150 million, so the profit multiple is about 31, also quite high for an industrial company. The issue for investors is if the high profits will continue to flow.
Aryt's CEO is Haim Stapler and the controlling shareholder is Zvi Levi with a 46% stake. The company manufactures shell fuses at its plant in Sderot, and has recorded large orders from the Ministry of Defense during the war, but is also expanding in Europe, the US and India.
Last Thursday, Aryt reported a sharp increase of more than five times in revenue in the first half of the year, to NIS 122 million. Management more than hinted that these were orders that may not necessarily repeat themselves on a regular basis. In explaining the increase in revenue, the company said, "The group's activity is essentially project-based, and therefore there is volatility in the company's revenue from year to year as a function of the entry into and implementation of new projects. The change in revenue does not necessarily indicate a future trend."
Yet, the surge in Aryt's sales boosted net profit by more than 1,500% to NIS 96 million. The company's equity has jumped sixfold within a year to NIS 285 million. Despite management's comments on revenue, Aryt's backlog of orders also continues to swell, standing at NIS 1.3 billion at the end of June.
Considering entry into the European market
Controlling shareholder Levi currently holds shares worth NIS 2.2 billion. He paid just NIS 5 million for his controlling stake in 2006.
Aryt's main activity is the development, production and marketing of electronic fuses for the defense market (through its subsidiary Reshef Technologies). Aryt reports that last year it began examining investments in the solar energy sector in parallel with its fuse activity, through a company called Aryt Sustainability. Regarding Reshef's activity, it is in an expansion mode and is examining, among other things, entering the European market. The company plans establish a factory or factories in Europe to manufacture fuses, and Reshef signed a memorandum of understanding with a Western European country to this end last February.
Reshef also has operations in India with a company called BEL, and a multi-year agreement has been signed between the parties. Reshef is also working on establishing factories to manufacture detonators, both in Israel and the US.
In the first half of 2025, the company said it had successfully developed a battery that forms part of the detonator, a critical component for which there is a shortage in the global market. Its subsidiary "expects that this product has separate sales potential from that of the detonators it has developed." Aryt also reported that it is developing an innovative detonator for loitering munitions, and expects this development to be completed in the second half of the year.
Published by Globes, Israel business news - en.globes.co.il - on September 2, 2025.
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