Buy MTAR Technologies, target price Rs 2,100: Motilal Oswal Financial Services

Motilal Oswal Financial Services has a buy call on MTAR Technologies with a target price of Rs 2100. The current market price of MTAR Technologies is Rs 1627.75. MTAR Technologies, incorporated in 1999, is a Small Cap company with a market cap of Rs 5005.66 crore, operating in the Engineering sector.

MTAR Technologies' key Products/Revenue Segments include Electronic Components & Equipments and Other Operating Revenue for the year ending 31-Mar-2024.

Financials

For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 191.64 crore, up 48.80% from last quarter Total Income of Rs 128.79 crore and up 14.29 % from last year same quarter Total Income of Rs 167.68 crore. The company has reported net profit after tax of Rs 18.77 crore in the latest quarter.

The company's top management includes Mr.Subbu Venkata Rama Behara, Mr.Parvat Srinivas Reddy, Mr.Praveen Kumar Reddy Akepati, Mr.Anushman Reddy Mitta, Mr.Venkatasatishkumar Reddy Gangapatnam, Mr.Gnana Sekaran Venkatasamy, Mr.Udaymitra Chandrakant Muktibodh, Ms.Ameeta Chatterjee, Mr.Krishna Kumar Aravamudan. Company has S R Batliboi & Associates LLP as its auditors. As on 30-09-2024, the company has a total of 3 Crore shares outstanding.


Investment Rationale
MTARTech, being the key supplier of precision engineered systems to large global MNCs, government departments, and large Indian public and private sector enterprises, has over the years created a niche for itself in the industry. As the largest supplier of fuel cell components to BE (global leader), the company will benefit from the emerging demand for fuel cells in the coming years. Further, the company is also increasing its wallet share with BE by offering more products, such as precision sheet metal fabrication and enclosures, with the aim of carrying out a complete fuel cell integration for BE. Motilal Oswal Financial Services believes the BE-related headwind is over now, and going ahead, strong order flows and agreements by BE should boost the business scenario for MTARTECH. Moreover, the diversification across segments by the company is expected to result in healthy revenue growth going ahead. The brokerage estimates MTARTECH to deliver a CAGR of 28%/42%/58% in revenue/ EBITDA/ adj. PAT over FY24-27 on the back of strong order inflows. They retain our BUY rating on the stock with a target price of Rs 2,100 (34x Dec'26E EPS).

Promoter/FII Holdings
Promoters held 36.42 per cent stake in the company as of 30-Sep-2024, while FIIs owned 7.81 per cent, DIIs 17.27 per cent.