Shares of MTAR Technologies were in focus today after global brokerage Macquarie initiated coverage on the firm. MTAR Technologies' stock is expected to rise 57.6 per cent to Rs 1,920, according to the brokerage.
Macquarie has assigned 'outperform' rating to the stock adding that MTAR Technologies is experiencing accelerated growth in end markets. The stock has gained after two days of fall. Shares of MTAR Technologies climbed 1.87 per cent to Rs 1,250 against the previous close of Rs 1218.10 on BSE.
The stock has lost 12 per cent in one year and fallen 50 per cent in 2022.
MTAR Technologies stock is trading lower than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages.
Total 9,913 shares of the firm changed hands amounting to a turnover of Rs 1.21 crore. The market cap of the firm rose to Rs 3,749.29 crore on BSE.
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The small cap stock hit its 52-week high of Rs 2,555.65 on January 3, 2022 and a 52-week low of Rs 1159.05 on August 23, 2021.
The company earned 64 per cent of its revenue from clean energy. MTAR Technologies manufactures power units (hot boxes) and develops hydrogen boxes and electrolysers. "Clean energy orders are short cycle orders which are dispatched on a monthly basis with Bloom Energy (MTAR's client) confirming the order for each subsequent calendar year in September," the report said.
The stock is valued at 35 times FY24E earnings per share with a target price of Rs 1,920 per share.
"While there is no exact like for like peers for MTAR technologies due to the unique business model spread across diverse verticals," analysts said.
"MTAR enjoys substantially better revenue growth expectation and margins as compared to both its peers. However, its working capital cycle is elongated and has a smaller tracker record as compared to its peers. Hence, we have MTAR using PE method at 35 times, which is a 20 per cent discount to Thermax's 10 yr average P/E," they added.
The Hyderabad-based company has precision engineering capabilities to build nuclear and pressurised water reactors, aerospace engines, missile systems, aircraft components and many such other critical components and assemblies.
MTAR Technologies has seven manufacturing facilities, including an export-oriented unit located in Hyderabad, and has been serving defence, aerospace and energy sectors for more than four decades.
It works with clients such as the Indian Space Research Organisation (ISRO), Defence Research and Development Organisation (DRDO), Nuclear Power Corporation of India Ltd (NPCIL) and US-based Bloom Energy Corp, besides catering to other well-known establishments like Bharat Dynamics and Hindustan Aeronautics (HAL).