MTAR Tech shares jump 15% today to hit fresh 52-week high; here's what fuelling the upside move

Shares of MTAR Technologies Ltd rose sharply on Friday, ahead of the launch of India's first-ever solar mission, Aditya L1, scheduled on September 2. The company offers high-tech products for PSLV and GSLV like liquid propulsion rocket engines (Vikas Engine for PSLV), cryogenic engine sub systems, electro pneumatic modules etc. These said products would be used for the upcoming Aditya L1 mission, MTAR Tech said. It is also manufacturing critical structure like grid fin for the Gaganyaan mission. The company's share price has been riding high on the back of Chandrayaan-3's success. MTAR Tech made core parts of the rocket engines and core pumps of cryogenic engines required for Chandrayaan-3 take-off.

The stock soared 14.75 per cent today to hit a 52-week high of Rs 2,817.75. It eventually settled 10.97 per cent higher at Rs 2,724.90. The company recently received the 'Defence Industrial Licence' for production of various mechanical and electronic subsystems. This would facilitate the ease of doing business with foreign MNCs on various defence projects, MTAR Tech said.

The licence would enable it 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, the company mentioned.

MTAR Tech received fresh orders of Rs 50 crore in Q1 FY24 against Rs 175 crore in Q1 FY23 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.

Domestic brokerage JM Financial said MTAR's order book grew 53 per cent CAGR over FY20-23, reaching Rs 1,170 crore mark (2 times FY23 sales), mainly led by improved ordering in the clean energy and nuclear energy segments. Order book was further supported by strong growth in product segment where the company introduced new products both for clean energy and other industries aimed at import substitution, it added.

Nuvama Institutional Equities said, "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."

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.