MTAR Technologies shares climbed 9% today; here's why

Shares of MTAR Technologies Ltd climbed nearly 9 per cent in Friday's trade after the company received orders worth Rs 226 crores for supply of various products in Clean Energy and Aerospace sectors. This includes Rs 191 crore of orders for various products from Bloom Energy in Clean Energy sector and Rs 35 crore of orders from customers in aerospace including Rafael, IMI Systems, and IAI. The stock soared 8.92 per cent to hit a high of Rs 1,773 on BSE.

"Furthermore, Rs 225 crore of orders are expected to be executed within one year and balance orders shall be executed by April 2026. The order value reflects the company’s increasing market share in Clean Energy and Aerospace sector," it said.

In a filing to BSE, MTAR Technologies said it received orders worth $22.57 million or Rs 190.90 crore from Bloom Energy Corporation. Besides, it received $1.81 million or Rs 15.31 crore worders from IAI Ltd. Pursuant to the long term agreement spanning over 15 years for supply of mission critical assemblies in Aviation sector, it is a first order from IAI, MTAR Technologies said.

Other than these two, the company received Rs 7.99 crore worth orders from Rafael Advanced Defence Systems Ltd and Rs 11.74 crore worth orders from IMI System. 

Managing Director & Promoter, Parvat Srinivas Reddy, said: " “We are optimistic about growth in Clean Energy and Aerospace verticals. The Company is expecting significant orders in both the segments going forward."

MTAR caters to Clean Energy – Civil Nuclear Power, Fuel cells, Hydel & others, Space and Defence sectors. MTAR has eight strategically based manufacturing units including an export-oriented unit each based in Hyderabad, Telangana.

MTAR generated nearly 70 per cent of its total FY24 revenue from one client Bloom Energy (BE), which is the global leader in manufacturing standard oxide fuel cells (SOFC). MOFSL said the client concentration risk has been a key concern for MTAR Tech, as seen in FY24 when BE went into product transition to Santacruz (65kw energy generation) from Yuma (50kw). This led to a slowdown in BE’s order flows to MTAR Tech, thereby impacting the company’s revenue and profitability.

The brokerage believes the BE-related headwind is over now, and going ahead, strong order flows and agreements by BE should boost the business scenario for MTAR Tech. The diversification across segments by the company is expected to
result in healthy revenue growth going ahead, it said.