Motilal Oswal's research report on MTAR Technologies
MTARTECH reported a weak operating performance in 1QFY25 as revenue was down 16% and EBITDA declined by 52% YoY. The 1Q performance was largely affected by adverse operating leverage due to lower revenue from the clean energy segment (fuel cells/nuclear power), higher employee expenses and high costs of first article products being developed for potential customers. The management expects a strong performance in 2QFY25, with revenue crossing INR2b (highest quarterly revenue) and margins recovering to ~20% on the back of strong visibility from orders in hand.
Outlook
Factoring in the weak 1Q performance, we cut our EPS estimates for FY25/FY26 by 7%/9%. We retain our BUY rating on the stock with a TP of INR2,100 (40x FY26E EPS).
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