MTAR Technologies shares surge 4% as firm receives defence industrial licence

Shares of MTAR Technologies surged 4 per cent in Wednesday's trade after the company received the ‘Defence Industrial  License’ for production of various mechanical and electronic subsystems in defence sector. This will facilitate the ease of doing business with foreign MNCs on various defence projects, MTAR Technologies said in a statement. Following the development, the stock rose 4.20 per cent to hit a high of Rs 2,321.65 on BSE.

The licence will enable the company to partner with foreign MNCs and cater to both domestic and export markets by taking up projects under Buy (Indian)’, ‘Buy & Make (Indian)’ & ‘Make’ categories of acquisition, thereby increasing the share of defence in its revenues.

MTAR has seven strategically based manufacturing units including an export-oriented unit each based in Hyderabad, Telangana. MTAR caters to clean energy – civil nuclear power, fuel cells, hydel & others, space, and defence sectors. The company has a long-standing relationship of over four decades with leading Indian organisations and global OEMs.

MTAR Technologies received fresh orders of Rs 50 crore in Q1FY24 against Rs 175 crore in Q1FY23 and Rs 1,066 crore for FY23. The total order book stood at Rs 1,079 crore at the end of June quarter against Rs 1,173 crore at the end of March quarter. The management maintained its FY24 year-end order book target at Rs 1,500 crore.

Nuvama Institutional Equities earlier this month said MTAR Technologies' revenue remained muted in June quarter that resulted in tepid earnings.

"As order book accretion remains strong, the management guided at 45–50 per cent growth in FY24. Given the robust order book, client additions in global aerospace and clean energy, and continued growth momentum from its biggest clients, MTAR Technologies will deliver on its guided growth in FY24. Our FY24/FY25 EPS estimate is unchanged as the pending (executable within FY24) order book is stable with consistent product launches," it said.

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