Buy Mishra Dhatu Nigam; target of Rs 281: ICICI Securities

ICICI Securities research report on Mishra Dhatu Nigam

Midhani’s new chairman and managing director, Dr. S.K. Jha’s commentary highlights that FY20 execution was tilted >60% towards the space sector. Capex for modernisation has led to 60-70% YoY increase in FY20 volumes. Order inflow for FY20 was Rs7.5bn and the orderbook stood at Rs16.8bn with >70% contribution from space. However, space-related orders and execution is expected to slow down over the next few months. >70% of order inflow expected in FY21 would be from the defence sector as select programs on missile development and air platforms indicate prospective ordering for Midhani.

Outlook

Management is striving to cross the MoU revenue target previously placed with the ministry of defence at Rs7.5bn. Maintain BUY.