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Brokerage firm Motilal Oswal wrote in its note that MTAR Tech has witnessed a rough patch over the last few quarters due to product transition by Bloom Energy (BE). Post the transition, there has been a strong demand for Bloom Energy’s fuel cells, which has given a boost to Motilal Oswal on the company’s near-term growth outlook.
BE recently signed an agreement with American Electric Power (AEP) to install 1 GW of power over the next two years and that brings an opportunity worth ₹900 crore to ₹1,100 crore for MTAR Tech, Motilal Oswal said.
MTAR Tech is also adding new clients across its business segments like Fluence Energy, which has a similar revenue potential to BE in the coming years. Current contribution from Fluence is nil but when the it wins orders in India, those will be passed down to the company.
Motilal Oswal is anticipating MTAR Tech to deliver a revenue, Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) and adjusted Profit After Tax (PAT) Compounded Annual Growth Rate (CAGR) of 28%, 42% and 58% respectively over financial year 2024 – 2027.
Client concentration has been a key risk for MTAR Tech as nearly 70% of its revenue comes from BE. A slowdown in BE’s orders to MTAR Tech, impacted the company’s financials. That, appears to have played out post the recent diversification.
Therefore, Motilal Oswal has a “buy” rating on MTAR Tech with a price target of ₹2,100. This implies a potential upside of 35% from Wednesday’s closing levels.
Besides Motilal Oswal, three other analysts have a bullish stance on MTAR Tech. InCred Reserch has a price target of ₹2,644 on the stock with a “Add” rating, while Yes Research and JM Financial have “buy” recommendations on the stock with a price targete of ₹2,350 and ₹2,575 respectively.
Shares of MTAR Tech are trading 2% higher at ₹1,586. The stock has corrected over 30% from its recent peak of ₹2,351. On a year-to-date basis, the stock is down 28% so far.
