MTAR Technologies hit a 52-week high of Rs 2,920.35 on September 11, 2023, and the company shares fell 23.6 percent following the Q2 results.
In comparison to its peers, the stock has a price-to-earnings ratio of 66.45, earnings per share of 33.5, and is trading at 10.4 times its book value.
MTAR Tech has deferred Rs 160 crore of revenues to the next fiscal year due to a technology change in its power generation models. The company is currently undergoing a transition phase to the new, more efficient models, which will result in higher power generation output.
Furthermore, received orders totaling Rs. 997.6 crores in Q2FY24 for a variety of industries, including Clean Energy-Civil Nuclear Power, Fuel Cells and Hydel, Space, Defense, Products, and others.
On a yearly basis, the company products like Clean Energy – Fuel Cells, Hydel & Others, Defense, and Products & Others gave major growth in the company and on a sequential basis 23.5 percent increase in Clean Energy – Civil Nuclear Power, 36 percent increase in space,113 percent increase in defense, 51.6 increase in Products & Others.
Nearly 85 percent of the company’s revenue in FY23 is derived from manufacturing climate-positive products in Civil Nuclear Power, Fuel Cells, Hydel, and waste-to-energy sectors.
The company has set up two solar rooftop plants of 1.38 MWe total capacity at Unit 2 and EOU to reduce its energy consumption. also company intends to set up solar rooftops at Adibatla and Unit 3.
According to Anand Rathi investment service
● MTAR Tech’s working capital has been affected by delayed payments and a decline in payable days, but the company is taking steps to address these issues.
● MTAR Tech is poised for continued growth in FY24 due to a strong order book, new clients, and sustained growth from existing clients.
● Despite the temporary working capital challenges, the brokerage rates MTAR Tech as a BUY with a target price of Rs 2,970 per share which implies an upside potential of 33 percent from its current price of Rs 2,229.
MTAR Technologies’ net revenue increased 32 percent year on year, rising from Rs 126.17 crores in Q2FY23 to Rs 166.83 crores in Q2FY24. Also, their net profit fell 17 percent year on year, from Rs 24.68 crores in Q2FY23 to Rs 20.45 crores in Q2FY24. These figures show that the company’s sales are up year over year while its net profit is down.
MTAR Technologies is a small-cap company with a Market capitalization of Rs 6,850 crores. It also has a return on equity (ROE) of 17.9 percent and a return on capital employed (ROCE) of 22.2 percent. In addition, over the last three years, the company has delivered an average net profit margin of 18.5 percent.
The company’s promoters hold a 39 percent stake in the company, with 9 percent owned by foreign institutional investors, 28 percent owned by the general public, and 24 percent owned by domestic institutional investors.
On Friday, the share price of the small-cap aerospace & defense company closed 1.54 percent up Rs 2,229 from its previous close of Rs 2,195.30.
MTAR Technologies, founded in 1970, manufactures various machine equipment, assemblies, sub-assemblies, and spare parts for the energy, nuclear, space, aerospace, defense, and other engineering industries.
Written by Sriram KV
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