Astra Microwave Products Ltd, part of the aerospace and defence sector shot up more than 75% in the past two months and has doubled investors’ money in one year by giving multibagger returns.
Ace Investor Radhakishan Damani holds 896,387 shares in the company which is equal to a 1% stake. The value of these shares is about 29.10 crores as of Wednesday.
The company’s share price increased by 13.74% in the past five days and by 75.03% in the past month. This means that if an investor would have invested ₹ 1 lakh in the company’s shares two months ago, the value of their holdings would have been ₹ 1.75 lakhs.
Further, the shares have given multibagger returns of 105.36% in the past year despite weakness in the Indian stock markets and the Russia-Ukraine war. Its share price increased from ₹ 157 levels to the current level of ₹ 323.50. This means that if an investor would have invested ₹ 1 lakh in the shares of the company a year ago, the value of their holdings would have been ₹ 2.05 lakhs today!
Astra Microwave Products Ltd is a small cap company with a market capitalization of 2727 crores. It has a dividend yield of 0.44% and a return on equity of 6.62%. Further, it has a debt-to-equity ratio of 0.12. They reached a 52-week high of ₹ 328.9 on Wednesday as their share price increased by 4.44% during early trades.
ICICI Securities has suggested a buy rating on the stock with a revised target price of ₹ 366 apiece (25x FY24E EPS) from Rs290/share earlier (20x FY24E earnings). The shares are currently trading at ₹ 323.50 apiece and this suggests an upside of 13.13%.
According to the brokerage, the company reported better than expected Q1FY23 numbers. Its revenue increased by 25.8% year-on-year. The management clarified the potential order book and revenue triggers; growth can significantly surprise over the next 5 years therefore ICICI Securities sees a higher valuation.
The company received the transfer of technology for the ‘counter-drone system’ from DRDO in Q4FY22, along with other companies like L&T and Adani Defence. Further, it has a major stake in an upcoming defence programme. In its investor presentation, the company highlighted that it has a major stake in light combat aircraft. It has developed various defence programmes and new technologies in India for radars such as Ashlesha, LRTR, CSR, and more.
Written by Simran Bafna
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