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MTAR Technologies shares gain 9% in 2 days; JM Financial sees stock at Rs 2,770 apiece

MTAR Technologies shares gain 9% in 2 days; JM Financial sees stock at Rs 2,770 apiece

MTAR Technologies share price target: JM Financial has maintained its 'Buy' rating on the stock with a revised target of Rs 2,770 on "robust credentials and strong growth outlook.

Amit Mudgill
Amit Mudgill
  • Updated Aug 31, 2023 4:20 PM IST
MTAR Technologies shares gain 9% in 2 days; JM Financial sees stock at Rs 2,770 apieceMTAR Technologies' order book grew 53 per cent CAGR over FY20-23, mainly led by improved ordering in the clean energy and nuclear energy segments.
SUMMARY
  • JM Financial said the robust order book provides ample visibility of healthy revenue growth.
  • MTAR's order book is fairly diversified with space and defence at 17% and clean energy at 74%.
  • MTAR Technologies has seven strategically based manufacturing units each based in Hyderabad.

Shares of MTAR Technologies, a precision engineering company, on Thursday climbed for the second straight day after the company received defence industrial licence for production of various mechanical and electronic subsystems in the defence sector. The licence will facilitate the ease of doing business with foreign MNCs on various defence projects, MTAR Technologies said adding that it will help it partner with MNCs and cater to both domestic and export markets.

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The stock climbed 5.63 per cent to hit a high of Rs 2,424 on BSE. With this, the stock has jumped 8.8 per cent for the two-day period. Domestic brokerage JM Financial has maintained its 'Buy' rating on the stock with a revised target of Rs 2,770 on "robust credentials and strong growth outlook."

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.

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"The robust order book provides ample visibility of healthy revenue growth as well as improving profitability given that most of its

contracts are short-term in nature, implying lesser probability of delays and cost overruns. The order book at 1QFY24 stood at Rs 1,080 crore and is fairly diversified in nature with space and defence at 17 per cent and clean energy at 74 per cent. MTAR anticipates large inflows in the nuclear segment to scale up this segment significantly by FY24 end," JM Financial said.

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.

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Its fresh orders stood at Rs 50 crore in Q1FY24 against Rs 175 crore in Q1FY23 and total orders of Rs 1,066 crore in 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.

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Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Published on: Aug 31, 2023 1:15 PM IST
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