MTARTECH - MTAR Technologies Limited Share Price

Management provided a positive outlook for MTAR Technologies Limited, forecasting a conservative revenue growth of 25% for FY '26 with anticipated EBITDA margins around 21%, subject to a 100 basis point variation. The company reported revenue of Rs. 676 crores for FY '25, marking a 16.4% year-on-year growth, alongside an EBITDA of Rs. 120.9 crores, representing a 7.2% increase. This growth is attributed to increased business from existing clients and new customer acquisitions.

Key points from management include:

1. Sector-Specific Growth: The Aerospace and Defense sectors are expected to contribute significantly, with anticipated growth of 80% in FY '26 due to successful contracts with ISRO, DRDO, and multiple multinational corporations (MNCs). Revenue from this segment was Rs. 93 crores for FY '25.

2. Clean Energy Growth: Management projects a 15-20% growth in the clean energy sector, which delivered Rs. 417 crores in revenue, driven mainly by projects in fuel cells and hydropower. The company is deeply engaged with leading firms like Fluence.

3. Civil Nuclear Sector: The civil nuclear revenue showed slower growth at Rs. 19 crores in FY '25 but is expected to ramp up to Rs. 60 crores in FY '26 based on ongoing nuclear projects and discussions around refurbishing reactors.

4. Cash Flow Improvement: Management highlighted an increase in operating cash flows to Rs. 101.3 crores, up from Rs. 57.4 crores, and a reduction in net working capital days to 229 days, aiming for further improvement.

5. Order Book: The company secured new orders amounting to Rs. 720 crores in FY '25, including substantial contributions from aerospace, defense, and clean energy. There's an expectation of ongoing robust order inflows, especially in the defense sector.

These factors collectively signify a confident growth trajectory for MTAR Technologies in the upcoming fiscal year and beyond.

Here are the major questions and answers from the Q&A section of the earnings transcript, with complete text provided:

1. Question: "So, FY '26 is going to witness a substantial [growth]. What kind of growth are we expecting in the nuclear segment for FY '26?"

   Answer: "We closed the order book at Rs. 155 crores for nuclear, expecting substantial order inflow in FY '26. We're quoting tenders for five reactor refurbishments and anticipate Rs. 700-plus crores in orders from the nuclear division, not included in the current business plan."

2. Question: "So nuclear will be more or less flattish for FY '26, is that correct understanding?"

   Answer: "From Rs. 19 crores in FY '25, we plan to achieve Rs. 60 crores in FY '26 based on existing orders. Yes, that aligns with our expectations."

3. Question: "In the products division, what's the guidance you have?"

   Answer: "Last year, we achieved Rs. 148 crores and anticipate at least 20% growth this year. We have developed various products, improving substantially, with several related to government organizations nearing qualification."

4. Question: "On aerospace and defense, you mentioned 80% growth, right?"

   Answer: "Yes, in FY '25 we achieved Rs. 48 crores in this sector, and for FY '26, we will target around Rs. 145 crores, spurred by new certifications and long-term agreements with MNCs, which increases our export capacity."

5. Question: "Regarding Bloom Energy, what is the commentary regarding their order book?"

   Answer: "Bloom has requested additional assemblies, starting execution this quarter. We expect to dispatch 4,000 units, maintaining our guidance of 21% EBIDTA margins, considering external factors including tariffs."

6. Question: "What was the factor behind the spillover and can we expect this in Q1?"

   Answer: "The spillover on domestic projects and export shipments paused due to US tariffs. We're gearing for a linear growth throughout the year, factoring external challenges into our guidance."

7. Question: "What kind of guidance are you giving for fuel cells for FY '26?"

   Answer: "We're targeting around 20% growth, achieving approximately Rs. 450 crores last year. We haven't included potential electrolyzer orders, which could enhance future numbers."

8. Question: "Is there any one-offs in the increase of other expenses?"

   Answer: "Yes, the increase relates to plasma coating for a US company. After qualification, our outsourcing costs are expected to decrease significantly over the next quarters."

9. Question: "On the clean energy segment, are you expecting growth?"

   Answer: "Absolutely, we're anticipating at least 20% growth this year in the clean energy sector, focusing on fuel cells and hydropower as we progress."

10. Question: "What factors give you confidence in aerospace revenue growth?"

Answer: "We've executed several first articles with successful certifications, which fosters customer confidence, enabling projected revenue growth. Last year's revenue was Rs. 9 crores, ramping to Rs. 145 crores in FY '26."

This encapsulates the main inquiries and detailed responses shared during the earnings call, adhering to the specified character constraints and maintaining key figures and guidance.