Started in 1999, MTAR is a leading precision engineering solutions company. The company is engaged the manufacture of mission critical precision components with close tolerances (5-10 microns), and in critical assemblies, to serve projects of high national importance, through company's precision machining, assembly, testing, quality control, and specialised fabrication competencies, some of which have been indigenously developed and manufactured. Since inception, The Company have strived to grow continually, contributing to the Indian civilian nuclear power programme,Indian space programme, Indian defence and aerospace sector, global defence and aerospace sector, as well as to the global clean energy sector. The company's offerings are served in the nuclear, space and defence, and clean energy sectors where Company manufacture critical and differentiated engineered products with a healthy mix of developmental and volume-based production, customised to meet the specific requirements of company's customers. For instance, The Company have been serving customers in the nuclear sector for over 35 years, and have established relationships with the Nuclear Power Corporation of India Limited ('NPCIL') having served them for over 16 years. The Company manufacture and supply specialised products such as fuel machining head, drive mechanisms, bridge and column and coolant channel assemblies, among others, not just for the new pressurised heavy water nuclear reactors, but also for refurbishment of the existing reactors. The Company have also supplied critical products such as grid plate, control plug and inclined fuel transfer machine for the prototype fast breeder reactor.Through company's long-standing relationships of over three decades and four decades with customers such as the Indian Space Research Organisation ('ISRO') and the Defence Research and Development Organisation ('DRDO'), com[any have been able to supply specialised products to the Indian space programme and the Indian missile programme, respectively. Within the defence sector, company undertook complex assemblies for the DRDO, including such as the base shroud assembly (for Agni missiles), and the assembly of secondary injection thrust vector control ('SITVC') valves and hydraulic fin tip control ('HFTC') valves. The Company currently operate through seven manufacturing facilities, including an export-oriented unit ('EOU'). These manufacturing facilities, each of which is situated in Hyderabad and Telangana employ advanced equipment to undertake precision machining, assembly, testing and quality control, specialised fabrication, brazing and heat treatment, and other specialised processes. As per financial performance, MTAR Technologies has posted total income/net profits of Rs. 160.54 cr. / Rs. 2.97 cr. (FY18), Rs. 185.91 cr. / Rs. 39.66 cr. (FY19) and Rs 218.14 cr / Rs 28.92 cr (FY20). For upto Q3 of FY21, company has posted profit of Rs 19.73 Cr on total revenue of Rs 122.60 Cr. So company has shown exceptional performance. MTAR has posted an average EPS of Rs. 10.51 and average RoNW of 12.96% for last three fiscals. Issue is priced at a P/BV of 6.26 as per NAV of 91.78 on 31.12.20. As per FY20 earnings, on fully diluted equity post issue, P/E is around 61. If we attribute latest annualised earnings of FY21 on fully diluted equity post issue, then asking price is at a P/E of around 46. So it looks fully priced. There is no listed peers as per RHP document. On BRLM's front, two BRLMs are associated with this IPO, and have handled around 17 IPO in last three fiscals. From last 10 IPOs, 4 are opened below issue price and remaining are opened above issue on the day of listing. As of now, 2 are trading below issue price and remaining above issue price. ( As on 25.02.20201) As per financials, results of MTAR Technologies are good, RoNW is 12.96% for last three fiscals and as per FY20 earnings issue is priced at P/E of 61 and for annualised FY21 earnings P/E is 46 on fully diluted equity post issue. Company caters to other companies from Clean Energy, Nuclear, Space and Defence sector and has order-book of around 336.19 Cr, so its working in niche segment. Performance of BRLM is average, So we give SUBSCRIBE rating to this IPO for listing gains.
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