MTARTECH - MTAR Technologies Limited Share Price

MTAR Technologies' management outlined a robust growth outlook across key sectors, backed by strong order inflows and strategic initiatives. Here are the major points:

1. Financial Targets:

   • FY25 Guidance: Revenue exceeding Rs.700 crore with EBITDA margins around 21% (±100 bps).
   • FY26-FY28: 30% annual revenue growth, with EBITDA margins improving from 24% (FY26) to 28% (FY28), driven by operating leverage and higher-margin projects.

2. Segment-wise Growth:

   • Clean Energy (Fuel Cells): Expects over Rs.430 crore revenue in FY26 from Bloom Energy, supported by a 1 GW supply deal for AI data centers. Proto orders from Fluence Energy (battery storage) to enter volume production post-June 2025.
   • Aerospace & Defence:
     • MNC Aerospace: Rs.125 crore revenue projected in FY26 (first articles + batch production); long-term agreements with IAI and GKN.
     • Defence: Exponential growth from FY26 (Rs.40+ crore), including scramjet combustors for hypersonic missiles.
     • ISRO: Rs.50 crore execution in FY26.
   • Civil Nuclear: Anticipates ~Rs.1,000 crore orders (Kaiga 5&6 + 5 refurbishment reactors) in the next 6 months, with Rs.75 crore execution in FY26.

3. Expansion & Diversification:

   • Oil & Gas: First articles underway; dedicated facility to drive Rs.150"“180 crore revenue in FY27.
   • Products Vertical: Targets Rs.170"“180 crore revenue in FY26 (current execution: Rs.130 crore in 9M FY25).

4. Operational Efficiency:

   • Reduced net working capital days to 222 (target: 175 by FY27).
   • Positive operating cash flow of Rs.102 crore in Q3 FY25; long-term debt reduced to Rs.132.5 crore.

5. Strategic Initiatives:

   • Commissioning dedicated aerospace and nuclear facilities.
   • Focus on import substitution (e.g., roller screws) and localizing supply chains.

Management remains confident in sustained growth across sectors, supported by order visibility, margin improvement, and diversification into high-potential verticals like battery storage and oil & gas.

Question 1:
"Today, on the guidance you provided a 30% revenue growth. Can you just say how much you expect the Clean Energy business to grow in FY '26?"
Answer: Clean Energy is projected to contribute approximately INR500 crores in FY '26, with hot boxes accounting for INR470 crores. Growth is driven by Bloom Energy's AI data center demand and assembly expansion, with potential upside from AEP order execution.

Question 2:
"Since you're seeing a quick ramp up on the Aerospace and Defence side, what kind of numbers you are seeing in this? When do you see this business ramping up? FY '27, is that correct?"
Answer: MNC Aerospace expects INR125 crores revenue in FY '26 (mix of first articles and batch production), with exponential growth from FY '27. A dedicated aerospace facility and certifications (e.g., NADCAP) will drive this. Defence targets INR40+ crores in FY '26.

Question 3:
"On the nuclear orders, when do you expect to get them?"
Answer: Orders worth ~INR1,000 crores (Kaiga 5 & 6 and 5 refurbishment reactors) are anticipated within 3"“6 months. Execution timelines: 18 months for refurbishment, 3 years for Kaiga. FY '26 will see partial revenue, with majority in FY '27"“28.

Question 4:
"From the Bloom Energy order, do we have any electrolyzer order also, or it is all about hot boxes only?"
Answer: Current focus is on hot boxes and expanding assembly work. Electrolyzer commercialization is delayed but validated; PLI participation is feasible if orders materialize.

Question 5:
"What are the key triggers to achieve 28% EBITDA margin by FY '28?"
Answer: Margins will improve via operating leverage, diversification into higher-margin aerospace/nuclear segments, and localization reducing import reliance (e.g., Inconel). Employee cost optimization and MNC volume production will aid progression to 24% (FY '26), 26% (FY '27), and 28% (FY '28).

Question 6:
"What is the update on Kaiga 5 & 6 nuclear reactor orders?"
Answer: Orders (~INR500+ crores) are expected by March/April 2025. MTAR's execution speed and expertise in 14 exclusive packages position it favorably. These orders align with India's 10-reactor plan, ensuring future opportunities.

Question 7:
"How do you view working capital and debt levels ahead?"
Answer: Working capital days improved to 222 (Q3), targeting 175 by FY '27. Long-term debt is INR132.5 crores, with INR46 crores annual repayment. FY '26 may require INR60"“80 crores new debt for oil/gas facility capex, offset by internal accruals.

Question 8:
"What are the margins across segments like hot boxes, nuclear, and aerospace?"
Answer: EBITDA margins are ~20% across segments. Space has slightly higher margins (5"“7% extra) due to free-issue materials. Bloom's margins align post-operating leverage, despite lower gross margins.

Question 9:
"What is the revenue outlook for new verticals like oil/gas and battery storage?"
Answer: Battery storage (Fluence Energy) prototypes to finish by June 2025, with FY '27 revenues (~INR150"“180 crores). Oil/gas targets INR150"“180 crores in FY '27 via new facility, rising to INR250 crores in FY '28.

Question 10:
"How will MTAR benefit from the government's INR20,000 crore nuclear budget?"
Answer: MTAR's 35+ years of NPCIL collaboration and exclusive capabilities in critical nuclear components ensure sustained order inflow from India's reactor expansion and refurbishment projects over the next 3"“5 years.