Tega Industries - Making A Mark On The Global Stage: Motilal Oswal

Motilal Oswal Report

Though Tega Industries Ltd. derives the majority of its revenues from exports (~75%), it is optimistic about domestic prospects as well, with the acquisition of McNally. There is a healthy opportunity potential especially on the coal and iron ore front, with the renewed interest in thermal capacity addition.

Notably, in addition to traditional minerals, the company has developed capabilities on the lithium and rare earths side which it aims to capitalise on, as and when it reaches a critical mass.

In terms of guidance, consumables segment is poised to clock in a compound annual growth rate of 15-20%, while the equipments segment will grow faster, albeit on a low base.

Overall blended margin would be in the 21-22% range. Net working capital would remain in the vicinity of ~110 days.

The stock is currently trading at 67 times FY24 earnings per share. Not rated.

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