MTAR Technologies’ share price has erased nearly 50 per cent of its value so far this year amid a bearish market sentiment. However, analysts at global brokerage and research firm Macquarie have now initiated coverage on the stock with an ‘Outperform’ rating and have projected massive upside potential. It sees new orders from Bloom Energy as the major catalysts for the company.
MTAR Technologies has been witnessing accelerated growth across end markets, led by clean energy. The company boasts of long-standing relationships with major end customers ISRO, NPCIL, DRDO and Bloom Energy, said Macquarie.
“The addition of new customers and capabilities makes for a robust outlook for MTAR,” it said, adding that working capital improvement remains key.
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. 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.
Incorporated in 1999, MTAR Technologies is a leading national player in the precision engineering industry. The company was listed in March 2021, with a strong listing pop and super solid subscription.
Its issue was subscribed more than 200 times and the counter was listed at about 100 per cent premium over its issue price of Rs 575. It tasted all-time highs of Rs 2,555.65 and is currently it is 52 per cent below from the peak
The company is engaged in the manufacturing of mission-critical precision components with close tolerance and critical assemblies through its precision machining, assembly, specialised fabrication, testing, and quality control processes.
Further, MTAR generates 14 per cent revenue from the nuclear segment where it primarily caters to NPCIL (Nuclear Power Corporation of India) with whom the company has been working for the past four decades. “Contribution of nuclear power to India’s overall mix is miniscule (1.7 per cent of installed capacity) with India currently having 22 reactors operational amounting to a total installed base of 6,780 MW (additional 700MW is connected to grid). This is significantly below that of advanced nations like France, US, and China where the share of nuclear energy is 70.6 per cent, 19.4 per cent and 4.6 per cent respectively,” Macquarie Research said.
Analysts added that India’s nuclear power capacity could jump 1.5x over the next five years driven by eight under-construction nuclear reactors (6GW) by NPCIL and a 2031 target of 22.6 GW.