MTAR Tech surges 23% in 2 days on receiving Defence Industrial Licence

MTAR Tech is targeting a revenue growth of 45 per cent to 50 per cent in FY24, backed by robust order book with an Ebitda of 28 per cent

Shares of MTAR Technologies hit a record high of Rs 2,817.75 as they surged 15 per cent on the BSE in Friday's intraday trade on the back of over two-fold jump in trading volumes.

In the past two days, the stock of the aerospace & defense company has rallied 23 per cent after the company received the Defence Industrial Licence for production of various mechanical and electronic subsystems in the defence sector.

The approval of license obtained for the manufacturing of C41 SR Systems license obtained (Command Control Computers, Communication Intelligence Surveillance and Reconnaissance Systems) includes, Electronics Equipment required for ECM (Electronics Co, Design, Development, Manufacturing, Integration & upgradation of Special naval equipment and their subsystems & Air independent propulsion system designed for submarines.

In an exchange filing, MTAR Technologies said that the licence will facilitate the ease of doing business with foreign multinational companies (MNCs) on various defence projects.

"The license will enable the company to be a partner with foreign MNCs and cater to both domestic & export markets by taking up projects under Buy (Indian), ‘Buy & Make (Indian)’ & ‘Make’ categories of acquisition, thereby increasing the share of dfence in revenues," the company said.

MTAR caters to Clean Energy — Civil Nuclear Power, Fuel Cells, Hydel & Others, Space, and Defence sectors.

At 01:05 PM, the stock was quoting 10 per cent higher at Rs 2,702, as compared to 0.64 per cent rise in the S&P BSE Sensex. A combined 4.4 million equity shares have, thus far, changed hands on the NSE and BSE. In the past three months, the stock has zoomed 50 per cent.

MTAR is targeting a revenue growth of 45 per cent to 50 per cent in FY24, backed by robust order book with an Ebitda of 28 per cent +/- 100 bps.

"Based on the visibility on various orders across different sectors, the company looks forward to a closing order book of at least Rs 1,500 crore by end FY24. Ramping up the sheet metal and specialized fabrication production is expected to yield better return ratios by end of FY24," the company said in its FY23 annual report.