The shares of this smallcap company jumped around 2 percent in Monday’s trading session after receiving an order worth Rs. 15.4 crores for the supply of full-scale combustors for the development of next-generation engines for defence programs.
Price Movement:
With a market capitalization of Rs. 5,403 crores, the shares of MTAR Technologies Ltd started Monday’s trading session on a higher note at Rs. 1,769.95, gaining around 2 percent compared to its previous close of Rs. 1,739.90 and are currently trading at Rs. 1,753 apiece.
What Happened:
Such a positive movement in the share price was observed after the company in an exchange filing announced that it had secured a significant order worth Rs. 15.4 crores from the Defence Research & Development Laboratory (DRDL).
The company received the order for manufacturing and supply of full-scale and sub-scale combustors for the development of cutting-edge air-breathing engine technology for defence programs. The company shall execute the order by September 2025 as per the contract terms.
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Financials:
Looking at the company’s financial statements, the revenue decreased by around 10 percent from Rs. 142.97 crores during the March quarter to Rs. 128.26 crores in the June quarter. On the other hand, the net profits declined by 9 percent from Rs. 4.87 crores to Rs. 4.43 crores during the same timeframe.
Order Book:
As of June 2024, MTAR holds a diversified order book valued at around Rs. 894.22 crores, with expectations of substantial orders from sectors like nuclear, clean energy, and defense.
Management Guidance:
As per reports, MTAR Technologies has retained its revenue guidance for FY25 in the range of Rs. 830 to Rs. 900 crores.
The company anticipates a 45-50 percent increase in revenues compared to the previous fiscal year, which reflects a strong recovery and growth trajectory following challenges faced in FY24 due to shipment delays in the clean energy sector.
Currently, approximately 66 percent of MTAR’s order book is focused on the clean energy sector, including fuel cells and hydropower. The company plans to further diversify its customer base, which is anticipated to fuel future growth.
Important Financial Ratios:
In terms of key financial metrics, the company reported a return on equity of 8.29 percent and a return on capital employed of 11.92 percent for the period spanning FY23-24. Additionally, the net profit margin stood at 9.66 percent during the same timeframe.
Company Profile:
MTAR Technologies Ltd is a leading precision engineering company specialising in the manufacture of critical components and assemblies for the aerospace, defence, nuclear, and clean energy sectors.
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Written By Vaibhav Patil
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