Geojit Financial Services research report on Astra Microwave Products
Astra Microwave Products Ltd. (AMPL) is a leading designer and manufacturer of a wide array of radio frequency systems, microwave chips, and microwave-based components and subsystems for defence, telecom, and space. In Q1FY25, AMPL reported a 16% increase in revenue, driven by healthy order execution, which was in line with estimates. EBITDA grew by 7.8x YoY, and margins expanded to 15.5% versus 2.3%, attributed to a better execution mix. Order inflow was healthy at Rs.302cr, and increased by 58% YoY, with ~80% of these orders being from domestic defence. The current order backlog is at Rs.2,100cr, which is 1.94x FY25E projected sales, providing visibility for the next 1.5 years. Order pipeline improving, with cumulative opportunities of Rs. 8,000cr within AMPL's Rs.39,000cr of total addressable market until 2030. With a shift in order execution mix towards domestic orders (~86% mix), we anticipate EBITDA margin in the range of ~22.2% for the next 2- 3 years.
Outlook
Considering the robust order pipeline and improving margin profile, we value AMPL at a P/E of 44x on FY26E, and upgrade to Accumulate rating from Reduce with a target price of Rs.976.
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