MTAR Technologies Q1 Review - Clean Energy Business Drags Down Earnings: Motilal Oswal

Motilal Oswal Report

MTAR Technologies Ltd. reported a weak operating performance in Q1 FY25 as revenue was down 16% and Ebitda declined by 52% YoY. The Q1 performance was largely affected by adverse operating leverage due to lower revenue from the clean energy segment (fuel cells/nuclear power), higher employee expenses and high costs of first article products being developed for potential customers.

The management expects a strong performance in Q2 FY25, with revenue crossing Rs 2 billion (highest quarterly revenue) and margins recovering to ~20% on the back of strong visibility from orders in hand.

Factoring in the weak Q1 performance, we cut our earning per share estimates for FY25/FY26 by 7%/9%.

We retain our 'Buy' rating on the stock with a target price of Rs 2,100 (40 times FY26E earning per share).

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