Subscribe to MTAR Technologies: Ajcon Global

Ajcon Global has come out with its report on MTAR Technologies. The research firm has recommended to ''Subscribe'' the ipo in its research report as on March 03, 2021.

Broker Research

March 03, 2021 / 17:35 IST

Ajcon Global IPO report on MTAR Technologies

MTAR Technologies Limited (“MTAR Technologies”) was incorporated on November 11, 1999. The company is a leading precision engineering solutions company engaged in the manufacture of mission critical precision components with close tolerances (5‐10 microns), and in critical assemblies, to serve projects of high national importance like rocket engines and satellites, gearboxes for fighter aircraft, complex assemblies for nuclear power reactors and hydrogen box used in fuel cells, through their precision machining, assembly, testing, quality control, and specialized fabrication competencies, some of which have been indigenously developed and manufactured. The Company owns seven manufacturing facilities in Hyderabad, including an export‐oriented unit.

Valuation and Outlook

At the upper end of the price band of Rs. 575, the Company's IPO is valued at P/E of 47x on 9MFY21 annualised EPS and at expected EV/EBITDA multiple of over 20x which is very expensive. The Company will always enjoy scarcity premium post listing as it operates in a specialized niche segment with strong entry barriers or moat it enjoys owing to its technological expertise built over the years with no major listed peers. We recommend "SUBSCRIBE for listing gains" to the issue due to the following factors: a) Company strongly positioned to tap opportunities in the clean energy, defence and space programmes.

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