Subscribe to MTAR Technologies: KR Choksey

KR Choksey IPO report on MTAR Technologies

MTAR Technologies is a leading national player in the precision engineering industry, primarily engaged in the manufacturing of mission-critical precision components with close tolerance and in critical assemblies through its precision machining, assembly, specialized fabrication, testing, and quality control processes. Since its inception, MTAR Technologies has significantly expanded its product portfolio including critical assemblies i.e., Liquid propulsion engines to GSLV Mark III, Base Shroud Assembly & Airframes for Agni Programs, Actuators for LCA, power units for fuel cells, Fuel machining head, Bridge & Column, Drive Mechanisms, Thimble Package, etc. A wide range of complex product portfolios meets the varied requirements of the Indian nuclear, Defense, and Space sector. ISRO, NPCIL, DRDO, Bloom Energy, Rafael, Elbit, etc. are some of the esteem clients. Currently, the firm has 7 state-of-the-art manufacturing facilities in Hyderabad, Telangana that undertake precision machining, assembly, specialized fabrication, brazing and heat treatment, testing and quality control, and other specialized processes.

Valuation and Outlook

At the upper band of issue price, MTAR will trade at a Price/EPS multiple of 23.3x of its annualized 9MFY21 revenue, which is at a discount to its listed peer like Schaeffler India (55.5x), SKF India (41.1x), Timken India (33.9) and L&T (40.2x). We believe that current price band is undervalued, looking at the growth potential in the company, we anticipate listing gains and give a ‘SUBSCRIBE’ rating to MTAR Technologies IPO.

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