The share price of MTAR Technologies has lost almost 50 per cent of its value so far this year amid bearish sentiment in the market. However, analysts at global brokerage and research firm Macquarie have now started coverage on the stock with an ‘outperform’ rating and anticipate a massive upside potential. It sees the new order from Bloom Energy as a key catalyst for the company.
MTAR Technologies is seeing accelerated growth in end markets led by clean energy. Macquarie said the company boasts of long standing relationships with key end customers ISRO, NPCIL, DRDO and Bloom Energy.
“Adding new customers and capabilities creates a strong outlook for MTAR,” adding that improving working capital is key.
Macquarie has given the stock an ‘outperform’ rating and said that MTAR Technologies is experiencing accelerated growth in the end markets. The stock has gained momentum after two days of decline. 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 fallen 12 per cent in one year and is down 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. A total of 9,913 shares of the firm changed hands with a turnover of Rs 1.21 crore. The firm’s market cap rose to Rs 3,749.29 crore on the BSE. The small-cap stock hit its 52-week high of Rs 2,555.65 on January 3, 2022 and 52-week low of Rs 1159.05 on August 23, 2021.
Established 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 almost 100 per cent premium to its issue price of Rs 575. It tasted an all-time high of Rs 2,555.65 and is currently down 52 per cent from the peak.
The company is engaged in manufacturing mission-critical precision components with close tolerances and critical assembly through its precision machining, assembly, specialized manufacturing, testing and quality control processes.
In addition, MTAR generates 14 per cent revenue from the nuclear segment where it mainly caters to the NPCIL (Atomic Energy Corporation of India) with which the company has been working for the past four decades. “The contribution of nuclear power to India’s overall mix is very low (1.7 per cent of installed capacity) India At present there are 22 reactors in operation amounting to a total installed base of 6,780 MW (an additional 700 MW is grid connected). This is much lower than advanced countries like France, USA and China where the share of nuclear power is 70.6 per cent, 19.4 per cent and 4.6 per cent respectively.
Analysts said India’s nuclear power capacity could grow 1.5 times over the next five years powered by NPCIL’s eight under-construction nuclear reactors (6GW) and the 2031 target of 22.6 GW.
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