MTAR Tech Expecting 30% Growth In FY26; What's The Orderbook Status? | NDTV Profit

Summary

In this interview, Mr. Parvat Shrinivas Reddy, Managing Director of MTAR Technologies, discusses the company's performance, future growth prospects, and key sectors of focus. He highlights a 30% year-on-year revenue growth target for the next three years, with significant improvements in margins. Mr. Reddy elaborates on the company's strong position in defense, aerospace, nuclear energy, and fuel cell industries, emphasizing large orders and expansion. He also addresses the potential of MTAR's nuclear reactor projects and their anticipated revenue growth, while confirming robust cash flows and no immediate plans for equity raising.

Takeaways

• 😀 MTAR Technologies is on track to meet its guidance for Q4, maintaining a 30% year-on-year revenue growth over the next three years with improved EBITDA margins of 24-28%.
• 😀 The company experienced strong momentum in Q3, which has continued into Q4, with expectations for sustained growth across all sectors.
• 😀 MTAR Technologies is seeing diversified growth across multiple sectors, including defense, aerospace, and clean energy, with R&D efforts driving success.
• 😀 The nuclear energy sector presents a major opportunity for MTAR, with an expected order book of 800,000 crores over the next three years, mainly driven by new reactor projects.
• 😀 Execution in the nuclear energy segment is expected to grow significantly, with orders in FY26 set to reach 100 crores, and by FY27, this will rise to 2500 crores.
• 😀 MTAR is expanding its fuel cell business, which has been growing steadily. The company is increasing its share with existing customers and focusing on new segments for future growth.
• 😀 The company aims for linear growth, with efforts to smooth out the traditional variability between the first and second halves of the year.
• 😀 MTAR’s cash flows and receivables are strong, with the company posting over 100 crores in operating cash flow last quarter.
• 😀 The company does not foresee the need for external fundraising in the near future, as it is confident in its ability to fund growth through internal resources.
• 😀 MTAR Technologies remains optimistic about its growth prospects, especially with the strong order book and expansion in key sectors like nuclear energy and fuel cells.

Q & A

What is the outlook for MTAR Technologies' revenue growth in the coming years?

MTAR Technologies has projected a 30% year-on-year revenue growth for the next three years. This growth is expected to be accompanied by improved margins, with EBITDA margins forecasted to rise to 24%, 26%, and 28% over the next few years.

Has the business optimism at MTAR Technologies improved since the February results?

Yes, the business optimism has improved. The company is following its guidance and has had a strong quarter 3, which has carried forward into quarter 4, maintaining a positive growth trajectory.

What role do the different sectors play in MTAR Technologies' growth?

MTAR Technologies operates in multiple sectors, including defense, aerospace, and clean energy. The company has diversified its portfolio, and all sectors are showing growth. They have been investing in R&D and new development to ensure sustained growth across these sectors.

What is the significance of MTAR Technologies' involvement in nuclear energy?

MTAR Technologies is betting big on the nuclear energy sector, with the Indian government's plan to construct 40 new nuclear reactors. The company expects to generate substantial orders, with a potential revenue increase from 1,000 crores to 1,500-2,000 crores over the next 6 to 7 years.

How much revenue does MTAR Technologies expect to generate from nuclear energy projects in the coming years?

MTAR Technologies expects to generate around 800-1,000 crores from nuclear energy orders in the next three years. In FY 2026, the company anticipates nuclear energy revenue reaching approximately 100 crores, with a significant jump to 225-250 crores in FY 2027.

What is the growth rate MTAR Technologies expects from its fuel cell business?

MTAR Technologies expects substantial year-on-year growth in its fuel cell business, as the company continues to increase its share of wallet within the segment and expand into other related markets.

Will MTAR Technologies' revenue growth be linear or variable on a quarterly basis?

While traditionally, the second half of the year has been stronger than the first for engineering firms, MTAR Technologies expects to see more linear growth on a quarter-on-quarter basis in the future, especially as they progress in their business and improve operational consistency.

How strong are MTAR Technologies' cash flows and receivables?

MTAR Technologies has strong cash flows and good receivables management. The company had an operating cash flow of over 100 crores last quarter, and they are not planning any fundraising at the moment due to the strength of their internal cash flow.

Does MTAR Technologies plan to raise equity capital in the near future?

At present, MTAR Technologies does not plan to raise equity capital. They are comfortable with their internal cash flows and approvals to fund their growth plans. However, they might reconsider if substantial opportunities arise that require additional funding.

How does MTAR Technologies' order execution in the nuclear sector impact their future growth?

MTAR Technologies has a substantial order book, particularly in the nuclear sector, with orders expected to be executed over the next 3-3.5 years. The execution of these orders will contribute significantly to their revenue and growth, with a projected doubling of nuclear sector revenue from FY 2025 to FY 2026.