Buy Astra Microwave Products; target of Rs 935: ICICI Securities

ICICI Securities is bullish on Astra Microwave Products recommended buy rating on the stock with a target price of Rs 935 in its research report dated August 14, 2024.

Broker Research

August 23, 2024 / 12:01 IST

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ICICI Securities research report on Astra Microwave Products

Astra Microwave Products (ASTM) Q1FY25 performance was stable. Key points: 1) Standalone EBITDA growth of 7.8x YoY on better product mix. 2) Order book stood at INR 20.9bn to be executed in next 12-36 months period. 3) Order inflow, in Q1FY25, was at INR 3.02bn, of which bulk was towards domestic defence. 4) Contribution from JVs also improved YoY. 5) Expanded skilled workforce to in line with the firm focus on R&D. We expect ASTM’s focus on IPbased products/solutions through a collaborative approach and harnessing in-house expertise, foray into anti-drone systems and participation in various domestic defence programs will likely help maintain earnings growth momentum. Besides, ASTM has facilities in place and is augmenting the team strength to capture growth opportunities. We maintain BUY on ASTM stock with an unchanged TP of INR 935 based on DCF based methodology.

Outlook

We believe that the company would be able to maintain healthy revenue growth trajectory with EBITDA margins in the range of 23-26% over the next few years. We maintain BUY on ASTM with an unchanged TP of INR 935 on the DCFbased methodology.

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